The Welfare Trust Annual Report & Accounts 1 July 18 - 30 June 19 Annual Report and Accounts Year ended 30 June 2019

Company Limited by Guarantee Number: 05098581 Registered Charity Number: 1103669

Registered Address P.O Box 2170 22 Queen Street Salisbury SP2 2EX

www.gwt.org.uk [email protected] 01722 323 955 CONTENTS

CHAPTER

Trustees’ report incorporating the Strategic Report 3-21

Statement of Trustees’ Responsibilities 23

Trustees, officials and advisors to the Trust 24

Auditor’s report to the members and Trustees 26-27

Consolidated statement of financial activities 28

Consolidated and Charity Balance sheet 30

Consolidated cash flow statement 32

Notes to the accounts 35-54

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 1

TRUSTEE’S REPORT FOR THE YEAR ENDING 30JUNE 2019

This report is drawn up in accordance with applicable accounting standards, including the Charities (Accounts and Reports) Regulations 2008 and the requirements of the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” issued in 2015 and the Companies Act 2006.

STRUCTURE, In the UK the Gurkha Welfare The Board of Trustees are Advice Centre, Salisbury responsible for setting the GOVERNANCE (GWAC) provides advice on strategic aims of the Trust. statutory entitlements and AND MANAGEMENT The Finance Committee, a sub- guidance on welfare support committee of the Board with available to ex- in UK approval to make decisions on who find themselves in need. TRUST STRUCTURE the Board’s behalf is, among A subsidiary office is located other responsibilities, tasked at Aldershot in support of a The Gurkha Welfare Trust’s with setting salary levels of key major ex-Gurkha settlement. (GWT or Trust) headquarters personnel. In setting these salary is in Salisbury, Wiltshire. The Trust has a wholly owned levels consideration is given to In The Gurkha Welfare trading subsidiary, GWT Trading benchmarking with equivalent Trust (Nepal) (GWT(N)), is Limited, whose accounts are roles in the wider industry. located in , West Nepal. consolidated in the group It oversees and directs the financial statements. activities of the Trust’s network TRUSTEE SELECTION of 21 Area Welfare Centres (AWCs) sited in key locations TRUST GOVERNANCE The Governance committee, throughout areas of traditional currently comprising a Chairman Gurkha recruitment in Nepal, The Trust was established by and three Members, is plus one Centre in , Trust deed in November 1969 responsible for oversight of . These AWCs provide the for the relief of hardship and Trustee selection. Trust platform for the delivery of all distress among Gurkha ex- procedures governing Trust welfare programmes as servicemen of the British Crown recruitment were updated well as providing a permanent and their dependants. It was by the committee in 2017 and footprint across the country re-constituted, also by trust ratified once more in 2018. deed, in 1994. In April 2004 to Gurkha communities. It was felt that further the Trust became a Charitable The AWC network has been enhancements to Trustee Company Limited by Guarantee restructured along geographical recruitment could be made and (CCLG). These accounts lines to create clusters based the Governance committee amalgamate those of the around five ‘key’ AWCs. promulgated new standard unincorporated trust in These self-supporting clusters procedures which were endorsed compliance with the Charity enable the multi-disciplinary by the Board on 11 September Commission’s uniting direction. Pensioner Support Teams (PST) 2019. These included greater to operate and support The development and execution of involvement of the Governance beneficiaries with the proactive Trust policies is the responsibility committee to ensure due and mobile delivery of both of a Board of Trustees that meets process; advertising for roles in welfare and medical assistance. three times each year. Their order to ensure greater exposure It also allows them to respond agenda is supported by a number to potential candidates and swiftly to requests for support of subordinate committees that formal interviews with direction and to react quickly to situations consider investment, governance, on panel composition. such as natural disasters. audit and finance matters.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 3 TRUSTEE’S REPORT

KEY MANAGEMENT PERSONNEL

The Trust’s Director is responsible for the day-to-day operation of the Trust. He directs and coordinates the work of the Salisbury headquarters and oversees the work of the Gurkha Welfare Trust (Nepal) and the Gurkha Welfare Advice Centres. The Director of the GWT(N) acts as the interface between strategic direction in UK and operational delivery in Nepal and provides assurance on authority, responsibility and accountability for the delivery of welfare support in Nepal in accordance with Trust policies, as well as insight into the political dynamics of Nepal. The Field Director of the GWT(N) in Nepal is responsible for daily operational management of the GWT(N) and implementing welfare support in accordance with Trust policies. A new key management position, Medical Director, has been created in order to oversee the Trust’s enhanced medical and healthcare system in Nepal. The role is based at HQ GWT(N) in Pokhara, Nepal. The Deputy Director Plans & Resilience is responsible for liaising with external organisations, future plans and the implementation of disaster preparedness. The Head of Fundraising leads the fundraising team in the UK.

IMPLEMENTING PARTNERS

Many of our services in Nepal are delivered in partnership with other organisations.

4 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

The Trust builds rural water and Some gain experience in the UK • Such other charitable purposes sanitation projects in Nepal office by assisting with fundraising which are in the opinion of the assisted by an annual grant and marketing efforts and others Trustees connected directly or provided by the British maintain a relationship with us indirectly with the foregoing Government’s Department for owing to their own longstanding purposes as the Trustees from International Development (DFID). association with the Brigade of time to time think fit. Gurkhas. Their individual and The Ministry of Defence (MOD) The Trust’s Vision is: “Gurkhas collective effort and dedication, continues to provide an annual living with dignity”. Welfare often over many years, is Grant in Aid towards staff and support is delivered against the appreciated enormously by administration costs of the following priorities: GWT(N) in support of welfare the Trust. We do not recruit delivery. This enhances value for volunteers to directly work • The provision of money for donors as it allows, on project delivery in Nepal, a Welfare Pension. apart from a few exceptional in conjunction with investment • The provision of cases where it is part of a income, all donations to be spent welfare/emergency grants. directly on welfare projects. funding commitment. • The provision of a medical In March 2019, the MOD formally support; a free primary announced a new £25M PUBLIC BENEFIT healthcare scheme for investment over ten years in beneficiaries and subsidised support of the Trust’s healthcare The Trustees have given due hospital care. provision for veterans in Nepal. regard to the Charity Commission’s • The provision of water In Nepal, the Trust continues guidance on reporting public and sanitation projects. to work closely with the Kadoorie benefit when planning the Agricultural Aid Association charity’s activities and are satisfied • The running of two (KAAA), which concentrates that the Trust is fully compliant Residential Homes (RH). on community aid and with the Charities Act 2011. • A programme of building development, including bridge 300 earthquake resistant construction, the provision homes for beneficiaries. of potable water supplies and OBJECTS hydro-electricity projects. • The building of schools AND ACTIVITIES and community centres Additionally, the Trust works The Trust raises funds in support in partnership with CAIRN in The Trust’s Objects are: providing a new holistic approach of welfare programmes involving to supporting education through • To relieve either generally or individuals and communities the provision of teacher and individually Gurkhas and their in Nepal and also in an advisory librarian training. dependants and other persons capacity in support of in Gurkha community areas, ex-Gurkhas in UK. In UK, the Trust works with the who are in conditions of need, relevant Government hardship or distress. departments and key service charities to enable the delivery • To promote the education FUTURE PROSPECTS of statutory and welfare advice of Gurkhas, dependants and The Trustees are confident that to ex-Gurkhas and their other persons in Gurkha there is a demonstrable need for dependants seeking settlement. community areas. activities delivered by the Trust • To make provision for the and that it can continue as a going medical diagnosis and concern. The Board feels that the treatment of Gurkhas and their VOLUNTEERS Trust is in a sound financial dependants and other persons position and able to maximise any People volunteer for the Trust in Gurkha community areas who opportunities throughout the in a number of different ways. are in need of such diagnosis or year as it actively seeks to expand Often members of the public raise treatment and for the through organic growth. funds on our behalf (community prevention of any disease or fundraisers), others offer to help adverse conditions which may The Trust’s core beneficiaries, the at Trust challenges and events. affect any such person: and Welfare Pensioners (WP), number

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 5 TRUSTEE’S REPORT

approximately 4,440 with this reporting period. Details of As part of this overall strategy the figure reducing by around 400 per this can be found under the Board approved the construction year. The strategy forecast Medical section of Achievements of 100 WP homes, each year for detailed below will, among other and Performance. three years, that meet the concerns, identify how the Trust Government of Nepal’s standard will adapt and evolve as a result of for earthquake resilient design to not only the declining number of RECRUITMENT ensure that our core beneficiaries WPs but also the added demands are given the best possible of supporting the 20,000+ Gurkha OF A NEW opportunity to withstand any veterans and their dependents in MEDICAL DIRECTOR future events or disasters. Nepal and Darjeeling who are currently eligible to access our This post will be key to ensuring healthcare provision. the continued progress and ACHIEVEMENTS maintenance of clinical standards AND PERFORMANCE and governance under-pinning THE STRATEGIC our healthcare provision. REPORT OUR FINANCIAL AID

IMPLEMENTATION This year we committed to provide TRUST STRATEGY OF THE CLUSTER financial aid to Welfare Pensioners and recipients of the Disability The Trust defines it priorities in SYSTEM AND MOBILE Support Grant during 2018/19. five-yearly increments, setting APPROACH TO At 1 July 2018 there were 4,831 parameters within which the Welfare Pensioners in receipt of a Trust can best respond to the WELFARE DELIVERY pension of NPR 11,000 per month, needs of ex-servicemen and their and 219 recipients of the Disability Following the introduction of dependents. The current five- Support Grant. We committed to this new concept of welfare year strategy defining activities a Winter Allowance in the form of delivery and its supporting runs until 2020 although it is the the provision of winter jackets, structure, all five clusters have subject of regular review as shawls and hats for all Pensioners been successfully introduced circumstances change. to be distributed prior to end of and all are fully operational November 2018. A new Strategic forecast is supporting our beneficiaries. being developed following We committed to the provision Board endorsement on 11th of financial support for family September 2019. PENSIONER RISK members required to provide full time care to our Welfare The priorities identified for ASSESSMENT (PRA) Pensioners through the Home Care this year were: Allowance, and for the immediate THE CONTINUED Each cluster, through their support to Welfare Pensioners Pensioner Support Teams, was and their families in times of IMPLEMENTATION tasked with conducting individual hardship through Hardship OF A WIDE-RANGING PRAs for each WP to ensure a Grants and a Funeral Grant. relevant and bespoke level of OVERHAUL IN THE welfare assistance to all. TRUST’S MEDICAL WELFARE PENSIONS STRUCTURE AND DISASTER RESILIENCE We pay a pension to thousands DELIVERY IN NEPAL. of impoverished Gurkha veterans Following the formal conclusion or widows in Nepal who aren’t Led by consultants from of the Trust’s earthquake eligible to receive a International SOS, a major reconstruction programme pension. The rate is calculated overhaul and professionalisation effort, attention has been each year using a ‘shopping of our medical services has been re-directed to disaster resilience, basket’ of basic goods such as undertaken throughout the planning and mitigation. rice, vegetables and firewood.

6 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

For many people, this is their only widows and 61 new WPs were which represents 30% of total source of income. In addition to granted, including 25 to those charitable expenditure. the food basket, the Trust now who have returned from the UK. utilises the Government of 46% of our Welfare Pensioners Nepal’s statistical data used to are now paid monthly through WINTER ALLOWANCE define the minimum wage as their bank accounts. another relevant benchmark. As at 30 June 2019 the number of Our Winter Allowance is an At the beginning of the reporting Welfare Pensioners had reduced additional annual gift distributed period there were 4,831 individuals to 4,444. to all of our pensioners to ensure in receipt of a Welfare Pension that they are equipped to endure For the Financial Year 2019/20 from the Trust. They were each the colder months of winter. Trustees agreed an increase of 5% paid a Welfare Pension equating to the rate of welfare pension The allowance was previously to 11,000 NPR per month. from NPR 11,000 to NPR 11,500 paid in cash however, in line with During the past 12 months 373 per month (NPR 132,000 pa). the Trust’s policy of avoiding cash Welfare Pensioners or their This increase maintains the rate payments in favour of payment widows have passed away. In at 100% of the food basket used in-kind, this reporting period saw addition to this number, 71 to determine a pensioner’s all of our Welfare Pensioners Welfare Pensions were ceased monthly requirement for issued warm winter jackets, owing to the pensioner moving essential items. In the Financial shawls and hats. to UK and four were relocated Year 2018/19 the cost of the The direct cost of the Allowance to one of our Residential Homes. Welfare Pension programme was in 2018/19 was £81,000 (2017/18: 67 pensions were transferred to £5,614,000 (2017/18: £6,025,000) £98,000).

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 7 TRUSTEE’S REPORT

DISABILITY This is attributable to the comparable facility in Nepal, Government of Nepal’s “build they set the standard of care SUPPORT GRANT back better” policy. Where before for the elderly. minor repairs to damage would During the year there has been For disabled children of our suffice, the policy means that core beneficiaries, we offer a between up to 48 residents in an entire rebuild has to take the homes. The annual running regular monthly grant similar place to ensure adherence to to the Welfare Pension. Without costs of both RHs are met by the Government’s earthquake designated funds. this financial support, and in resilient design criteria. the absence of a developed- Following a report commissioned world health system, disabilities In 2018/19 1,831 grants were by the Trust and conducted by can pose an insurmountable distributed in total at a cost Humanities & Inclusion, obstacle in Nepal. of £880,000 (2017/18: 1,985, a Kathmandu based NGO, £536,000). Funeral grants were In 2018/19 227 people received Trustees have granted authority paid in respect of 357 former to include Physical & Functional the grant (2017/18: 219). The total Welfare Pensioners. cost of these grants in 2018/19 Rehabilitation (P&FR) – such as was £232,000 (2017/18: £215,000). The additional cost also includes physiotherapy, training and the first tranche of the Trust’s modifications to living spaces earthquake-resilient home project. so that beneficiaries are able to return to their community HOME CARERS when care is successfully ALLOWANCE OUR EARTHQUAKE- concluded. Rehabilitation is directly linked with the ability Sometimes, family members RESILIENT HOMES to live with dignity, the core of our Pensioners care for them ethos of the Trust. By keeping full-time. When this happens It’s not if another earthquake a number of bed spaces vacant they are able to apply for a hits Nepal, it’s when. We are in each RH there is facility grant from us to support them taking pre-emptive action by within existing resources to meet as they are unable to work. building earthquake-resilient this requirement which is be homes for Gurkha veterans available to all Welfare Pensioners. In 2018/19 406 people received and widows. We have committed Residents continue to benefit this grant (2017/18: 302). to the provision of 100 homes The total cost of these grants from the activities run by RH staff in each of the next three years in 2018/19 was £89,000 (2017/18: under the supervision of Bihani commencing July 2018. £74,000). Social Venture. This included a This year 103 new homes for successful and hugely popular vulnerable pensioners were field trip by residents of both WELFARE GRANTS completed. These homes offer RHs to Kathmandu. a safer alternative for some of An upgrade to RH Kaski is our most vulnerable Pensioners. We are needed the most on-going; on completion a similar during moments of tragedy. upgrade package will occur at When disaster strikes in the RH Dharan, further improving form of fire, flood, landslide OUR RESIDENTIAL the facilities and environment or earthquake, GWT is ready HOMES for the residents and staff. to provide immediate assistance, Additional staff are being by offering financial and The Trust runs two Residential recruited to ensure that the other support. Homes (RHs), one located at the residents of both RHs receive The overwhelming number Area Welfare Centre (AWC) at the highest level of care. of Welfare Grants given in Kaski, west Nepal and a second 2018/19 were for the immediate located at the AWC at Dharan, relief of destitution with the east Nepal. remainder in response to fire, The Homes provide round-the- flood and landslide damage. clock care to Gurkha veterans There has been a significant rise and widows who would otherwise in welfare grants this year. struggle to live alone. With no

8 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

CASE STUDY: GETTING TIKA AND HER VILLAGE BACK ON THEIR FEET

Tika Maya Sunuwar and her local community are an amazing example of what we can achieve for whole villages thanks to your help. Tika lives in a small village which is a two-hour drive from our nearest Welfare Centre in Jiri. It boasts a population of around 250 people. Receiving a pension (£75) we give her each month makes her the breadwinner in her Tika was previously married to family and she shares the funds Ranga Bahadur Sunuwar, who with them wherever she can. served with 10th Princess Mary’s Own Gurkha Rifles for 12 years before leaving the Army in 1964. Earthquake damage He has since sadly passed away. When the earthquake struck in “I remember many of my friend’s 2015 her village was severely husbands passed away due to affected. As well as irreparable battles. I felt very bad for them. damage to her home, the village’s I can still remember that they communal taps were also badly were crying and I was giving them disturbed and as a result many empathy regarding their loss. water sources dried up. I was proud of my husband and With her community relying everyone because I personally heavily on local agriculture, and felt that they were very brave with water fetching times People can access the water in to sacrifice their life. I was very becoming unmanageable, she their own house. worried about my husband reached out to us for help. because I thought he will also Now, I can clean my face properly. die in that war.” Thanks to the response to our I can use water for my vegetables emergency appeal here in the UK, as well as for my animals.” Having not served the 15 years we were able to get straight to Tika speaks with pride about the required to receive a British Army work on a new earthquake- involvement The Gurkha Welfare pension, Tika relies on us to pay resilient house for Tika and her Trust have had in her life. As well her a pension. The 11,000NPR family – somewhere she could feel as the new home, the pension and safe and somewhere to call home. the water source she now benefits from, her grandchild has just Bringing water to started at the local school – also people’s doorsteps built by The Gurkha Welfare Trust. Our team then helped get Tika’s “Namaste. Thank you to all the community back on their feet. people who have helped in a time The new water system we period when I need support. You installed in the village has are looking after me. When I ask removed the need for anyone for clothes, you provided me with to fetch water – by placing one a winter shawl. I feel very happy. tap stand at each household. GWT staff come to my house, “It used to take nearly an hour check my health and bring happiness to my family. They are to fetch water. There were public very friendly and chat with me taps but still we needed to queue when they visit my village. for quite some time. It was very difficult to manage that water for Thank you for your love and household activities and for our support. My community including personal hygiene. Now people are my family is very happy and proud happy about the new development. for your noble cause.”

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 9 TRUSTEE’S REPORT

OUR MEDICAL AID We committed to the provision engagement of consultants from of primary medical care enabling International SOS, the upgrading The Trust provides an international all pensioners access to an of facilities and the increased standard of healthcare and appointment at one of our professionalism of the service. medical centres and to be medication to Gurkha veterans In 2018/19 the Trust supported seen by appropriately qualified and their families living in Nepal. two medical camps at Baglung medical staff. We do this through our regional and Bhojpur that treated a total medical clinics, via home visits by During the year the team saw number of 2,817 individuals from specialist staff and by arranging 73,500 cases at a cost of the wider community at a direct subsidised treatment at carefully £5,218,000 (2017/18: £4,686,000). cost of £89,000 (2017/18: £89,000). selected national hospitals. The increase in cost is due to the This cost was met in full by

CASE STUDY: RIFLEMAN MANBAHADUR GHIMIRE TURNS 100

Over ten decades Rifleman so that he could be looked after Manbahadur Ghimire has lived by his second son and his family. many lives… Life in Nepal can be incredibly Born in Bhojpur in eastern Nepal tough and his son’s family Manbahadur joined the army in struggled to support Manbahadur. 1942. After his initial training he In 1994 we began paying was posted to 3rd coy, 3 platoon Manbahadur a pension, to help and 3 section of 9th Gurkha Rifles. him afford life’s essentials like With the world in the throes of food and fuel. By the 2000’s he World War Two, he sailed from was finding it tough to get by India with his battalion to Italy even with this income. and later Greece where he fought the Germans. For four years The move to our Manbahadur fought in battles Residential Home across Europe with courage and skill. In 2010 we opened a Residential Home for Gurkha veterans and When the War was finished and widows in Kaski. Manbahadur was the Army downsized, Manbahadur delighted to be one of our first was no longer needed. residents. Three years later we opened a second Home in the Life in Nepal after the War east of Nepal (Dharan). We moved He returned to Nepal and, in a Manbahadur there so that he Earlier our staff were excited to tale familiar to us here at The could be closer to his family. throw him a 100th birthday party. Gurkha Welfare trust, began a life Manbahadur is incredibly well- “Nobody knows what future of subsistence farming for him respected by our staff, the Home’s serves us. I turned 100 years in and his family. visitors and his fellow residents 2018 and so I wanted to share my alike. Always cheerful and up for a Sadly, Manbahadur was widowed happiness with all” twice – he lost his first wife many game of cards, he is often the years ago and his second in the focal point of social functions. “Living was quite difficult. I mid-1980s. He is perceived by our staff as a survived many years of adversity As he grew older he was unable to wise man and someone to go to and still am alive because I was farm like he used to and found it for advice. A very religious man, sure God had planned something hard to harvest enough crops to he spends every morning wonderful for me; better life with get by. He moved to a very conducting a ‘puja’, a Hindu dignity and respect, I am living it remote village in eastern-Nepal prayer ritual. since GWT sheltered me.”

10 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

Kadoorie Agricultural Aid these medical camps and the The Trust is now evaluating how Association (KAAA). The format Trust will bear the financial to most effectively utilise this of medical camps continues responsibility thereafter. additional funding for the benefit of Nepal-based pensioners. to be evaluated with clinical The MOD announced that it was governance and patient support investing £25M over the next ten In this year the introduction of being of highest priority. The new years in medical support for an integrated Nepal-wide Medical Medical Director will take the lead veterans living in Nepal. This information system incorporating on the future direction and contribution is aligned with the appointments, consultation and composition of medical camps. recommendations of the All Party procedure records, prescribing, KAAA have announced that from Parliamentary Group (APPG) report dispensing and labelling of 2020 they will cease funding in to Gurkha grievances in 2014. medications, referrals for lab tests,

CASE STUDY: FROM JUNGLE WARFARE TO A PEACEFUL VILLAGE LIFE

Rifleman Bhim Prasad Rai very good. I am very happy and so he receives from us is vital for proudly served with the 6th are the people from this village. All his wellbeing. Gurkha Rifles between the people got to see a doctor and “We are very grateful for the December 1944 and January 1947. the medical camp is free of cost.” things you have done for us. “I went to fight when the war was While at the camp we were able When the British government about to end. Those who had to to provide him with medication needed us at the time of World fight against the German across for his arthritis and for his high War Two, where both the the sea used to get Khaki blood pressure. We were also Germans and Japanese were uniform. And those who had to able to provide him with a pair attacking them, we went and fight in the jungle like me used to of adjustable eye-glasses to help helped them. We helped them get green coloured uniform.” with his sight which, by his own win the war and even celebrated When World War Two finished admission, has deteriorated together, taking out a victory Bhim resigned from the Army due with age. rally. I think because of that they to personal reasons and returned “I didn’t have much problem are helping us in return.” to his village in the east of Nepal. seeing far objects but I had some Now 91 years-old he is proud to difficulty in seeing small, near still be living in the village his father objects. Now, after getting the grew up in, and his grandfather glasses I can easily read and see before him. These days he shares close objects clearly. I don’t use his home with his wife, his sons these glasses every time. I only and his granddaughter. We caught use it to read, write something up with him recently at our and even to see the calendar. Medical Camp in the region. I also know the power of these glasses can be adjusted but so Free Medical Camp far, I don’t have to adjust anything. I am happy.” We provide free medical camps for communities living in the We helped them win remote hills of Nepal. For many, this is the only medical assistance the war and even they receive. Bhim was attending celebrated together our 101st camp in the country. Bhim has also been a recipient of “It is very good because to come the Welfare Pension we pay to this far out and to give such a nice impoverished veterans, for just service not only to ex-servicemen over ten years. With no other but also to other people in need is source of income, the money

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 11 TRUSTEE’S REPORT

imaging and to see secondary staffs are already providing. As well environment is created that care providers has been as this, the changing of four rooms promotes improved education implemented across all locations. in each of the Residential Homes and hygiene, eliminates gender from long term residential beds to disparity and enhances the In addition to the fixed short term, rehabilitation or facilities available to students applications within the AWCs, this respite interventions is almost and teachers alike. This project, has also been extended into the completed in Pokhara and soon to and all future school projects, pensioner’s homes by the use of start in Dharan. The services have includes the provision of a library. mobile applications on tablets already started as we could not In collaboration with the CAIRN which link back to the main wait for the infrastructure to be Trust, librarian training was software. This has brought about altered, and Dharan in particular provided as well as a teacher enormous safety improvements has had some very positive training programme. Monitoring as doctors can now safely outcomes for the patients they and evaluation will be conducted prescribe to any location as have had for a few weeks and then over a two - five year period. required and after a conversation returned home in a much stronger with the GWT health practitioner physical and emotional state, as seeing the patient at the time. well as great improvements from OUR CLEAN WATER The new system has allowed the the carer’s perspective. introduction of appointment AND SANITATION systems in all the key AWCs which Our water projects bring clean in turn has ensured a reasonable OUR SCHOOLS water and sanitation to remote consultation time for all patients, communities in Nepal. We install Our schools’ programme builds, improved the efficiency of the individual tap stands and toilets repairs and improves schools in doctors and significantly reduced to households and schools. remote regions of Nepal and in the amount of waiting time for By ensuring a safe water source turn provides access to education the elderly pensioners compared and providing a comprehensive and a better future for Nepali to the previous “first come first education programme on the children. This year we committed served” policy. importance of sanitation we see to the provision of two major and sharp drops in water-borne We have enabled a country wide 98 minor school projects. laboratory service with blood diseases such as dysentery. tests being taken in all the key Retaining the skills and expertise in We committed to delivering 95 AWCs making for a “one stop construction techniques amongst projects in 2018/19 and preparing shop” for the pensioners and our staff is a key requirement in for a further 90 projects in removing the burden of paying ensuring that we retain key skills 2019/20 within the current and claiming back the costs from in-house to ensure we can react contractual agreement with DFID. immediately following natural a provider that they would have Over the year a total of 101 disaster and forms part of our had to see separately in the past. (2017/18: 125) projects were disaster resilience strategy. We have been able to start constructed; 93 new projects gathering data from the Total expenditure in 2018/19 (2017/18: 112) and 8 projects was £1,119,000. The following management information system repairing existing schemes were completed during this and make some extremely (2017/18: 13). This constitutes reporting period: important safety improvements. coverage of a total of 5,252 For example searching for all • Two major school builds households with a total number patients on certain drug (including the new ‘model” of 30,342 people benefiting combinations that are potentially school in Tanahun district). (2017/18: 31,603). In addition to the main projects 11 simple drip dangerous permitting efficient • 20 minor school extensions. irrigation (SDI) schemes were evaluation and modification completed benefitting 383 as required. • Six major school refurbishments households with a population of The rehabilitation/respite services • 104 minor school refurbishments 2,319 (2017/18: 11 projects, 369 have progressed and we are A new “model” school concept has households, 2,485 beneficiaries). poised to add to our staff mix now been implemented and will be These schemes ensure that some full time rehabilitation formally assessed. It includes the families have the means to grow therapists to further improve the participation of multiple partners vegetables both for themselves rehabilitation activities that our to ensure that a conducive and to market.

12 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

CASE STUDY: SHREE SIDDHARTHA PRIMARY SCHOOL

Nestled in a village 50km south of the bustling tourist town of Pokhara, Shree Siddhartha Primary School was founded back in 1954. The school’s classrooms had suffered substantially during storms in the annual monsoon season and when the earthquake struck in 2015 the walls became unsafe. As a result children were being taught in temporary corrugated iron (CGI) structures in a bid to keep lessons going. “Before, it used to be very hot during the day as the CGI sheets started heating up. There was no adequate supply of water so the toilets were not very clean.” Ms. Shristi Sigdel, Class 5, 11 yrs old

Model school concept For the first time in the history of and carpets to ensure their new built and installed gender- our schools programme we have environment was conducive to separate toilets (which we know been working towards a ‘model’ learning. The CAIRN Trust were can make all the difference to school concept, looking not only able to provide further materials student attendance levels). We at the structure and buildings of including teaching tools and will shortly be delivering some schools but also at the way a new whiteboards. educational sessions on school may benefit the whole Teacher training: The CAIRN sanitation at the school and local community and provide the Trust were able to arrange two distributing re-usable sanitary very best standard of education weeks training in Pokhara for the pads for female students. available for Nepali children. school’s teachers. Following the training a coach has been A new start for Creating a school attached to the school for the the children step by step next 18 months to ensure that staff are supported in all that “GWT chose us for its ‘Model Buildings: We created a new they are doing for the children. School’ concept and they school building entirely, built to completed the construction in our earthquake-resilient standards Library: The school library to ensure that students would be building is now in place and The 7 months! Including providing us protected were the worst to CAIRN Trust are working to with toilet blocks, safe drinking happen again. The new building furnish it with books so that both water, desks and benches. boasts eight classrooms across the pupils and the local I would like to thank the GWT two floors. The site is contained community can benefit. for this help. I hope this within a wall and compound fence, Water and Sanitation: We have continues as we aim to become keeping pupils safe. installed taps which access a safe a leading example for Furnishing: We furnished the and clean water source located educational institutions.” new building with 130 new almost 2km away in the jungle. As Mr. Bodh Raj Sigdel, benches, 65 desks, 10 book racks well as multiple taps we have also School Principal

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 13 TRUSTEE’S REPORT

In partnership with DFID the Trust delivered the projects at a cost of CASE STUDY: QUEENS OF THE ROAD: £3,361,000 (2017/18: £3,359,000). OUR ALL-FEMALE MOTORBIKE TRAINING Our projects have a proven life of at least 15 years and in many cases over 25 years, giving an average cost of £32 per household per year which is ~29% lower than most other schemes demonstrating long term value for money to DFID and our donors. Following DFID’s review of projects completed in 2018/19 RWSP was awarded an A+ rating, the highest available and a great accolade to the efforts of all staff in this significant accomplishment.

OUR DISASTER

Some of our female staff in Nepal have been undertaking motorbike RESILIENCE training. Their new skills will enable them to venture out to The Earthquake Response support Gurkha veterans and widows living in the hills of Nepal. programme was completed in Last year we partnered with the Speaking about the terrain 2018, delivering the final eight UK’s leading road safety charity we operate on in Nepal, school projects and two and advocate IAM Roadsmart. We trainer Scott Tulip said: community centres. Total asked them to help train our staff programme expenditure following on motorbike techniques to keep “These are tracks throughout the earthquake in 2015 was £11M. them safe in the hills of Nepal. the mountains. They are rough (very) in places and steep.” A new contract with DFID, The training was a big success but extending beyond the current identified a need for a slightly “We are not training for contract’s conclusion in 2020, is amended training programme to competition here, or even being defined and will, for the cater for some of our female recreational off-roading. first time, also include an element colleagues. On 25 March 2019 IAM This is work for them, with encompassing disaster Roadsmart trainers were back in serious consequences if they do preparedness. At its core lies the Nepal to make that happen. not arrive at their pensioners Trust’s network of 21 AWCs. It will to deliver care and assistance.” be this national and permanent Our all-female footprint which will provide the motorbike training Pooja Gurung, one of our framework and flexibility in any Mobile Health Officers Over the five-day course, a future response to natural or commented on the opinion of selection of our female staff were other disaster. female motorcyclists in Nepal: taught the basics of motorbike As part of this overall strategy mechanics, how to safely mount “It is common in Nepal to be the Board approved the and dismount our bikes, and some looked at differently if ladies renovation of pensioner homes practical training over difficult are riding a bike. We need to to ensure they meet the terrain. Once our team had change this.” Government of Nepal’s standard mastered the basics they were for earthquake resilient design so out on some longer journeys – “[In this training] we have gained that our core beneficiaries are reflective of the kind of drives such confidence levels. The given the best possible they will be taking to reach our thinking that girls cannot do it is opportunity and security to most vulnerable pensioners in not right. We can do it – we need withstand any future events or remote villages of Nepal. to keep trying and not give up.” disasters. In addition to the implementation of this pre-

14 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

emptive strategy a two week dynamic and mobile approach to work supporting the increasing training course in disaster welfare delivery direct to our number and complexity of management was conducted for pensioner’s homes. How often a welfare cases in the UK the Trust our field staff by Team Rubicon UK. pensioner is visited will depend makes an annual welfare grant to ABF – The Soldier’s Charity. All key AWCs, which form the on the vulnerability assessment During this reporting period, this nodal point of each cluster, have that has been conducted for all welfare grant was £250,000. The been equipped with new Satellite Welfare Pensioners with those Trust remains extremely grateful communications systems that deemed most vulnerable being for the assistance provided by enable both voice and data visited with greater frequency ABF – The Soldier’s Charity and connectivity which will be vital in according to need. those other organisations that coordinating a response to a A comprehensive maintenance are routinely involved with natural disaster but also enable schedule has taken place to assisting those arriving from those in the field to communicate upgrade all AWC facilities. Nepal to settle in the UK. updates, including images, to This programme includes support any emergency electrical systems upgrades, fundraising appeal. As part of the the provision of secondary Trust’s reserves, a £6M Disaster power supply, the installation INTERNAL Response fund has been set aside of air-conditioning and cooler COMMUNICATION as designated funds which will units (for pharmaceutical allow the Trust to respond and storage), upgrading fire safety Effective communication with act immediately when required. equipment and the extension of employees is of vital importance WiFi into AWC medical centres. and the Trust has established procedures to provide information In the UK, the Trust has a Gurkha to, and consult with, employees OUR STAFF AND Welfare Advice Centre (GWAC) on financial, employment and to assist pensioners and their INFRASTRUCTURE other matters that affect them. dependants with access to welfare The staff and administration and statutory entitlements that costs of the GWT(N) continue to arise as a result of linguistic and be met in large part by the MOD cultural hurdles. This centre is DIVERSITY through an annual Grant in Aid co-located with the Trust AND INCLUSION (GIA) for the Trust’s contribution Headquarters in Salisbury. In to fulfilling vital tasks on behalf of addition, the Trust runs another The Trust is committed to the serving and retired members advice centre jointly with HQ promoting and supporting of the , that Brigade of Gurkhas (HQBG) in diversity through the creation the MOD is unable to facilitate Aldershot, one of the main centres of an environment in which itself, through its network of of Gurkha settlement in the UK. individuals are treated on the staff and AWCs throughout Nepal The Trust and both GWACs work sole basis of their relevant merits by the secondment of a Field closely with local councils, and abilities. All staff and trustees Director and Project Engineer and Government departments and share this commitment. part of the time of the Defence other Service charities to ensure The Trust will not tolerate any Advisor as Director GWT(N). effective support to those ex- discrimination or behaviours towards an individual in respect These tasks include liaising with servicemen and their dependents of age, disability, race, religion, family members of serving who may struggle as a result of gender or sexual orientation, Gurkha servicemen in linguistic and cultural hurdles in which are offensive, discriminatory compassionate cases. accessing appropriate support. or hostile towards the individual. Our network of 21 Area Welfare Those service charities remain Centres (AWCs) has been divided responsible for meeting the cost Through the provision of in to five clusters with up to four of any welfare support which reasonable adjustments within satellite AWCs centred around a enables the Trust to retain its the workplace, the Trust seeks to Key AWC (Butwal, Kaski, focus on Nepal and those ex- maximise the talent and Kathmandu, Dharan & Damak). servicemen and their dependants opportunities for both potential Within these clusters, multi- who remain in conditions of very and current employees. disciplinary Pensioner Support real poverty and distress. Arrangements will be made, Teams (PST) facilitate a more However, in recognition of their wherever possible, for retraining

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 15 TRUSTEE’S REPORT employees to enable them to TRAINING OUR POLICIES perform work identified as appropriate to their aptitude The Trust is committed to Grants Policy and ability. ensuring that staff are properly Welfare Pensions are awarded in The Trust complies with all UK trained for their roles as well as cases of destitution to ex Gurkha legislation and applies this as best helping maintain motivation and Soldiers who have served in the practice in Nepal wherever supporting continued British Army and their widows practicable, in accordance with professional development. We Nepal statutory regulations. have increased the number of who have not qualified by length staff available to deliver in-house of service for a pension paid by training as well as utilised a wide the British Government. All cases ENVIRONMENTAL range of individuals and teams are investigated by an Area from UK, where the necessary Welfare Officer and only in cases MATTERS skills do not exist in Nepal. where obvious destitution exists are they granted. All cases are re- Both staff in the UK and in Nepal The Trust is committed to examined at a time determined at have enjoyed comprehensive minimising the impact that its the time of award, but no longer training over the year including processes have on the than five years, to ensure that environment and to providing a topics such as specialist the pension is still required. safe working environment for our rehabilitation and physiotherapy, employees. Accordingly, a new masonry and plumbing, digital Hardship grants are made when Environmental policy is being fundraising, monitoring and the applicant reports, or the produced by the Trust. evaluation and many more. hardship case is discovered by a

16 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

Pensioner Support Team. At this • We aim to only telephone or alternative investments and stage a form is completed email people who have given smaller companies. The purpose outlining the situation, the status us explicit consent to do so. of the two main portfolios is to of the applicant and any other With direct mail, we use the delineate the Trust’s requirements relevant details. In the case of Information Commissioner’s between monies that are held as a house rebuild, details of land Office (ICO) guidelines around an immediate reserve to cover ownership are also captured. ‘legitimate interest’ when cash flow requirements (c. 18 Group cases, such as large-scale contacting supporters. months) and truly long-term rebuilding of houses following a • We do not share supporter monies which can weather capital natural disaster such as the 2015 details with any other volatility and have a 5-7 year time earthquake are considered by organisation for marketing horizon. The medium-term members of a board who will or fundraising purposes. portfolio is seeking a return that decide relative merits of cases is better than cash (three month and allocate appropriate resources • We update donor details on LIBOR) and over the last 12 months within priorities and budget. our database according to their to 30th June produced a return wishes and ensure our database of 5.2% (after fees) compared A Home Care Allowance is is fully GDPR compliant. to the benchmark of 0.8%. awarded to those who support • We have a procedure for The long-term portfolio is seeking our most vulnerable pensioners, logging complaints: a return that is better than those who are unable to look www.gwt.org.uk/complaints both a composite benchmark after themselves or even to get (a composition of indices) and • All out of bed. The allowance is made staff have regular training an inflation plus target (CPI + 4%). on Data Protection. to a member of the family or an Over the past 12 months the acquaintance who will then look • We update our Privacy Policy long-term portfolio returned after the pensioner, manage their on a regular basis to comply 7% (after fees), compared to the medical condition and ensure with ICO guidance. benchmark of 7.5%. that they eat properly. Allowances are only granted once • We do not wealth screen in case specific training has been compliance with the GDPR. received and regular visits are • We only share donor data with INVESTMENT RISK – made to ensure the ‘home carer’ third parties assisting us with THE RISKS & HOW is discharging their duties our fundraising and we take appropriately. Such allowances every measure to ensure data DO WE MITIGATE are reviewed when the pensioner is transferred securely via THESE THROUGH risk assessment is reviewed. encryption and passwords OUR INVESTMENT and to secure servers. Fundraising Policy • Our supporters are at the heart STRATEGY? In order to comply with best of everything we do and you can Investment risk covers a number fundraising practice and General find our Supporter Promise here of different areas and the Data Protection Regulation (https://www.gwt.org.uk/wp- investment committee, on behalf (GDPR) we have taken the content/uploads/2017/08/Our of the Trustees, have reviewed following steps: _vow_to_you.pdf). the internal procedures as well as the investment process of their • We have paid the levy to join fund manager in order to ensure The Fundraising Regulator Investment Policy that all of the industry safeguards and promote our association and Performance are in place. The investment and aim to comply with their The Trust meets the key committee have guarded against guidance on our website. challenges of short-term liquidity, two main areas of risk. cash flow flexibility and long t • We have joined up with the erm sustainability by cash The first is to ensure that the Fundraising Preference Service holdings and splitting cash flow from the UK to Nepal and ensure nobody is contacted investments between a medium- does not force the realisation of who registers with them. term investment portfolio and a investments held within the • We comply with and regularly long-term investment portfolio. portfolio when not appropriate review the Fundraising Code In addition there are two more, and this has led to the setting up of Practice. smaller funds invested in of the medium-term portfolio.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 17 TRUSTEE’S REPORT

The second investment risk is the OUR PRINCIPAL RISKS Centres spread across the recognition that the MOD’s grant country which provide a local in aid and the Trust’s fundraising AND UNCERTAINTIES base for emergency response. activities are in a different If one area is affected severely currency (Sterling) to the recipient then neighbouring centres can a. Operational Risks beneficiaries (Nepali Rupee – NPR). immediately move in to provide It is difficult to mitigate this risk as Operational risks that confront support. This national footprint there are few investments that the Trust are the result of: forms the cornerstone of our can be made in Nepal and the NPR • Ongoing political and social future disaster management had been in decline against uncertainty in Nepal. The 2017 plan. A collaboration with DFID sterling for some time until it federal, provincial and has had a positive approach recently reversed. The solution municipal elections made the and will be developed further has been to keep some monies in communist alliance the most in the next financial year. Nepal (in NPR) and to move a powerful in Nepal’s democratic proportion of both the long and • Activities that jeopardise history. There were high medium-term portfolios into US$, the Trust’s reputation. expectations that stability the Indian Rupee (the Nepal Rupee The Trust operates in a country would attract investment, is pegged to the Indian Rupee at a that has a relatively high risk rate of NPR 1.60/1 INR) and to create jobs and improve of fraud and corruption. have a large weighting of overseas accountability and governance. To minimise this risk Audit equities and bonds within the Despite inevitable teething and Governance committees long-term portfolio. problems there has been monitor recruitment and success in implementing the adherence to procedures. new federal structure which An internal audit function RISK MANAGEMENT has set the foundations to carries out risk related checks. move forward. However, the In addition, GWT(N) senior All activities are subject to regular political environment remains management are recruited risk review by the Board of challenging. A Maoist splinter from former Gurkha officers Trustees. Major risks are, for this group, Biplav, has successfully who have a proven track purpose, those that could have orchestrated nationwide record of financial probity in a significant effect on: strikes accompanied by a the British Army. The Trust is significant number of hoax committed to ensuring the • The Trust’s operational and explosive devices. As yet, safeguarding of our beneficiaries performance, including risks none of the Trust’s facilities and our employees. GWT(N) to personnel and volunteers. or operations have been has continued to deliver • The Trust’s ability to achieve directly targeted but it has appropriate safeguarding its objects. served to disrupt our routine training to all staff and • Meeting the expectations of activity. During a recent UK assessing the compliance and beneficiaries and supporters. visit, PM KP Oli raised the reporting of activity with subject of the Tri-Partite internal policies remains a • The Trust’s reputation Agreement (1947) and his priority for the internal and integrity. desire to see this replaced assurance and audit programme. • The Trust’s assets. with a more current bilateral b.Financial Risks The Trustees review all risks arrangement. The effect on an ongoing basis and satisfy of a renegotiated treaty is The Trust faces a number of key themselves that adequate currently being assessed by financial risks. The Trustees procedures are in place to the UK Government but could consider that the following minimise and manage the risks potentially alter the way the summarises those financial risks identified. Where possible and Trust operates in Nepal. and their responses to them: appropriate, risks are covered • Natural disasters. Nepal • Funding Risk. The Trust by insurance. suffers from a high level of negotiates grants awarded The Trust’s financial Reserves seismic activity as evidenced to finance its activities and policy is assessed and set at a by the earthquakes in 2015. incorporates this information level which enables the Trust to The Trust has a decentralised into its annual business plans. help manage its risks. structure with Area Welfare The fundraising team spreads

18 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

its appeals across a wide range of sources of funding CASE STUDY: RAISING FUNDS to minimise risk. ONE STEP AT A TIME • Exchange Rate Risk. The Trust monitors the rate of exchange on a daily basis. Over the long term the rate of exchange moves to counteract the differential in inflation between two countries but over periods of up to 10 years politics and financial confidence can cause significant movements up or down away from this trend. As inflation has traditionally been higher in in Nepal than UK the movement has benefited the Pound and assisted our work in Nepal. However, in 2007 the financial collapse severely affected the In 1974, when Simon Hood was seven years-old he sat and watched value of the Pound and again soldiers from the 10th Gurkha Rifles training at Dhekelia Garrison in June 2016, following the in Cyprus. referendum. Following a period With Turkey having just invaded I have multiple sclerosis, I get very in which there were signs of the island, the Gurkhas had been tired and can trip over my own recovery, the political sent to defend the British feet for no apparent reason.” turbulence in the UK in sovereign base. It was a moment May/June 2019 has resulted Simon persevered and he never forgot. in a further fall. Over the past supported by his very own TEAM 25 years the Pound has gained This year Simon Hood is GURKHA (his wife Caroline and by an average of 3% per annum President of the Overseas friends) helping with the but this includes swings of plus Buffalos Association, one of the fundraising, and friends Jeff 16% or minus 14%. At present, largest fraternal organisations in Daysh, Len Whiteing, Mark a 1% change to the average the . Cussons and daughters Kathryn rate creates an increase or and Kloii Hood walking with him He has very kindly chosen The reduction in costs of £180,000 he finished in a time of around Gurkha Welfare Trust as their but it also changes the value five hours. charity of the year and is of our liabilities on the balance undertaking a host of activities “The walk took 5 hours, with sheet by £450,000 so our net to raise money for us – several stops along the way for assets can change in value by supporting impoverished rest and drinks etc. It was very over £5,000,000 from one year veterans and widows in Nepal. picturesque with sheer cliff to the next. To mitigate against faces and fields of cows and adverse movements funds to sheep to walk through. Overall a cover three months cash flow Sponsored walk steady pace was what I required are held in Nepali Rupees and On Saturday 15 June Simon took to achieve my goal of the investment portfolio is part in a sponsored walk from completing the walk.” spread across a wide range Whitby to Robin Hoods Bay Simon smashed his fundraising of currencies. along the Cleveland Way, a route target, raising in excess of of around eight miles with £1,500 for the Trust. Later this elevations of over 300 metres. year Simon hopes to return to “The most challenging part of the Cyprus, where he will lay a Poppy walk for me was basically all of it, wreath during Remembrance.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 19 TRUSTEE’S REPORT

ADDITIONAL POLICIES Other notable donations include continue to support future £235,000 (2017/18: £220,000) proposals which include the The Trust is committed to contributed by all ranks of the continuing development of sustainable development, Brigade of Gurkhas and the individual aid and medical meeting the needs of our of the support as well as in-depth beneficiaries without Police Force under the review of disaster resilience in the Gurkha communities. compromising the ability of Service Day’s Pay Giving scheme. The Trust’s volunteer regional future generations to meet their branches continue to pro-actively own requirements and this is raise funds for the Trust totalling a guiding principle within our RESERVES £96,000. Legacy income totalled work in Nepal. Concern for the £6,115,000 (2017/18: £4,352,000). environment is an integral and The use of Gift Aid generated fundamental part of this Designated Fund additional income of £854,000. commitment and our aim is The Trustees are concerned that to reduce the impact of our To address wider economic the level of running costs of the operations on the environment. uncertainty and the resulting Residential Homes should not challenging financial environment, have a detrimental effect on our A new, updated Environmental Trustees approved a 5-Year ability to provide support to the policy is being promulgated in Fundraising Strategy commencing much wider community of support of the Trust’s approach. 2018/19 to both sustain and Welfare Pensioners. Therefore, a diversify and subsequently designated fund has been created increase our income streams. that is sufficient to meet the OUR FINANCIAL costs for 20 years. Following REVIEW specialist advice on the risk of EXPENDITURE future earthquakes, in June 2018, the Trustees agreed a designated Income Charitable expenditure totalled fund (£6,000,000) to allow an £18,826,000 (2017/18: immediate response to natural Trust income from all sources £19,325,000). This is 87% of total disaster. Designated funds total during the financial year expenditure of £21,535,000 £14,909,000 (2017/18: 2018/19 was £21,154,000 (2017/18: £21,522,000). Our cost £14,964,000) as at 30th June 2019. (2017/18: £21,052,000). of raising funds including Donations from individuals, investment management is Restricted Funds companies, trusts and other £2,709,000 (2017/18: £2,197,000) The Trust started the year with organisations totalled £6,755,000 of which 83% is covered by our £348,000 in funds restricted to (2017/18: £6,793,000). We continue investment income of £2,253,000. assist water projects and schools to be supported by the MOD who Fundraising expenditure of in Nepal. At the 30th June 2019, provided a grant of £2,937,000 £2,406,000 (2017/18: £1,889,000) there was a balance of (£50,000) (2017/18: £2,810,000) towards the continues to be effective raising of which £35,000 is restricted for cost of the means of delivery of income of £13,225,000 (2017/18: 100 Homes and school projects our aid. Our current contract with £12,197,000). This represents a and (£85,000) is held in funds DFID is due to run until 2020 and Return on Investment of £5.50 restricted against the water and during the year we received for every £1 spent (2017/18: sanitation programme, to be £2,650,000 (2017/18: £3,247,000). £6.47). 2018/19 is year one of offset with funding from DFID the 5-Year Fundraising Strategy in 2019/20. TRAILWALKER, an annual which is based on increased fundraising event on behalf of investment for donor acquisition the Trust, coordinated by the in order to sustain and increase Constructive Obligation Queen’s Gurkha Signals Regiment total income over the five year When a charity has created a valid in conjunction with Oxfam GB, period and beyond. The rate of expectation through past was cancelled due to safety return remains above industry practice that it will meet a liability concerns over extreme standards but has predictably the Charity Commission requires temperatures and rescheduled dropped as a consequence of it to recognise the liability on the for September 2019, but still the planned increased investment. balance sheet as a constructive resulted in income of £104,000. This expenditure is planned to obligation. The Trust considers

20 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 TRUSTEE’S REPORT

that a constructive obligation matched in the future or that beneficiaries, a transformational has been created for the payment investments/assets will change programme has been of the Welfare Pensions and maintain their value. implemented. the disability support grants. Trustees consider that the Trust Remaining priority areas ideally requires free reserves identified include: Reserves Policy equivalent to 12 months of • Medical Information Based on a risk assessment standard expenditure not covered System (IS) and after allowing for funds by other provisions, currently The new Medical IS has been to meet the constructive around £16,350,000. This level of designed and installed but it obligations, Residential Homes reserve will enable the Trust to requires further software adjust its infrastructure and running costs and Disaster improvements to allow it to respond quickly to any of these Response, as mentioned above, provide the bespoke data risks. The Reserve Policy is the Trust’s Reserves Policy required to support the Trust’s reviewed annually during the takes into consideration: medical and healthcare system. budget setting process taking Further recruitment of specialist • The Trust’s clear and long-term account of current and future staff will take place to provide objective of supporting the risks and the economic climate, sufficient resilience in support of Welfare Pensioners in their both in the UK and Nepal, and GWT(N)’s IT requirements. declining years including the consequential impact on the provision of welfare and Trust’s investment portfolio. • Medical provision in Darjeeling medical support. After taking the Constructive The Trust will address medical • Essential provision for a period Obligation into account the Trust and healthcare provision in of readjustment for those in has total funds of £34,951,000 Darjeeling. A new AWC location receipt of welfare support if (2017/18: £31,000,000), however, has been found and a technical the Trust should ever be the free reserves which are refurbishment programme due required to reduce or cease its available to meet contingencies to commence under the guidance activities, for whatever reason. and exclude tangible fixed assets, of ISOS. The recruitment of staff, materiel and resources will • The Trust’s requirement to designated and restricted funds commence under a new two-year respond promptly and amount to £19,303,000 (2017/18 contract with ISOS endorsed by appropriately to new and restated: £15,015,000) as at 30 the Board on 11th September. unforeseen needs or challenges June 2019. This represents 118% This will replicate the that might affect the way in of the level of reserves deemed improvements made in Nepal. which welfare support is appropriate by the Trustees. delivered. Trustees specifically Given the volatility of investment • The 100 Homes Project note the Trust carries out its markets, the continued The second tranche of 100 welfare activities in a country uncertainty over future rates of pensioner homes to be where there are not only exchange, the uncertain constructed to an earthquake geophysical dangers such as fundraising climate and the resilient design will take place in earthquakes but also political, substantial risk of future natural 2019/20. This Project ensures social and economic disasters in Nepal, Trustees will greater safety and security for uncertainties. In addition, to continue to keep Trust finances our core beneficiaries to deliver welfare support, the under close review balancing withstand any future disaster. Trust depends on a number of current needs and the need to • Introduction of Physical partners whose support in the reach the ideal level of reserves and Functional Rehabilitation future is not guaranteed. to protect the interests of beneficiaries in the future. (P&FR) • The impact of adverse changes Following a study conducted by to the rate of exchange a Kathmandu based NGO, H & I, between Sterling and the FUTURE PLANS the Trust has decided to Nepali Rupee (NPR). introduce, initially, limited P&FR • Economic adversity, as despite Following a detailed review of services utilising the resources a strong supporter base, there how the GWT(N) needs to deliver and capacity of our two RHs. is no guarantee that recent welfare in the future to our levels of income will be ageing and less mobile

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 21

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

Trustees, who are also directors of The Gurkha Welfare Trust for the purposes of company law, are responsible for preparing the Trustees’ report (including the Group Strategic Report) and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare The Trustees are responsible for the maintenance financial statements for each financial year. Under and integrity of the corporate and financial company law the Trustees must not approve the information included on the charitable group’s financial statements unless they are satisfied that website. Legislation in the United Kingdom they give a true and fair view of the state of affairs governing the preparation and dissemination of the charitable company and the group and of the of financial statements may differ from legislation incoming resources and application of resources, in other jurisdictions. including the income and expenditure, of the charitable group for that period. In preparing these So far as each of the Trustees is aware at the time financial statements, the Trustees are required to: the report is approved: • select suitable accounting policies • there is no relevant audit information of which and then apply them consistently; the company and the group’s auditors are unaware, and • observe the methods and principles in the Charities SORP; • the Trustees have taken all steps that they ought to have taken to make themselves aware of any • make judgments and accounting estimates relevant audit information and to establish that that are reasonable and prudent; the auditors are aware of that information. • state whether applicable UK Accounting This Trustees’ Report incorporating the Strategic Standards have been followed, subject to any Report was approved and authorised for issue by material departures disclosed and explained the Board of Trustees on 12 December 2019 and in the financial statements; signed on its behalf by: • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable group will continue in operation. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company and the group’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable group and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the charitable company’s constitution. They are also responsible for safeguarding the assets of the charitable company Lieutenant General Sir Nick Pope KCB CBE and the group and hence for taking reasonable steps for the prevention and detection of fraud Chairman and other irregularities. 12 December 2019

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 23 TRUSTEES

Under the patronage of HRH The Prince of Wales KG KT GCB OM AK QSO PC ADC

VICE PATRONS Investment Committee Field Director The Gurkha D J Hitchcock Esq OBE (Chairman) Welfare Trust (Nepal) Field Marshal The Lord Bramall J J Brade Esq MBE Lieutenant Colonel S J Whitlock of Bushfield KG GCB OBE MC JP Major General J J Cole OBE*** QGE (to 4 October 2019) (to 12 November 2019) P M Rigg Esq Lieutenant Colonel E Davis QG Field Marshal Sir John Chapple SIGNALS (from 4 October 2019) C Gate Esq GCB CBE DL Deputy Director Miss OBE Audit & Finance Committees Plans & Resilience D P Clifford Esq MVO (Chairman) J R White Esq (to 11 September 2019) TRUSTEES, Head of Fundraising S Cooper Esq (Chairman) Ms S J Cherrington OFFICIALS (from 11 September 2019) Investment Managers AND ADVISORS Colonel J P Davies MBE (from 20 September 2019)** Sarasin & Partners LLP Juxon House, Trustees Dr J D Keeling 100 St Paul’s Churchyard Lieutenant General Sir Nick Pope MBA, MB BS, FRCGP, DRCOG London EC4M 8BO KCB CBE (Chairman)* Colonel J G Robinson CBE Auditors J J Brade Esq MBE (to 20 September 2019)** Haysmacintyre LLP D P Clifford Esq MVO Ms C L Turner 10 Queen Street Place, (to 11 September 2019) London EC4R 1AG Major General J J Cole OBE*** Governance Committee F S Dufficy Esq (Chairman) Bankers S J Cooper Esq The Royal Bank of Scotland (from 11 September 2019) J J Brade Esq MBE Major General A J S Fay CB*** Lawrie House, Victoria Road, Colonel J P Davies MBE Farnborough GU14 7NR (from 20 September 2019)** D G Hayes Esq CBE HSBC Bank plc F S Dufficy Esq 90 Baker Street, London W1M 2AX Major General A J S Fay CB*** Major (Retd) Krishnabahadur Solicitor Gurung MVO MBE THE GURKHA A J Lutley Esq D G Hayes Esq CBE*** WELFARE TRUST Springfield, Rookery Hill, Ashtead Park, Ashtead, Surrey KT21 1HY D J Hitchcock Esq OBE Dr J D Keeling Director Registered Address MBA, MB BS, FRCGP, DRCOG The Gurkha Welfare Trust P.O Box 2170 A P W Howard Esq 22 Queen Street Colonel J G Robinson CBE ** Salisbury SP2 2EX (to 20 September 2019) Director The Gurkha Welfare Major General G M Strickland Trust (Nepal) Company Limited DSO MBE*** Colonel I Logan by Guarantee Number Ms C L Turner (to 7 December 2018) 05098581 Lieutenant General R Wardlaw Colonel R Goodman Registered Charity Number OBE*** (from 7 December 2018) 1103669

* Ex officio Trustee – Colonel Commandant Brigade of Gurkhas ** Ex officio Trustee – Colonel Brigade of Gurkhas *** Nominated Trustees – Gurkha Brigade Association, The , The Queen’s Gurkha Engineers, The Queen’s Gurkha Signals and The Queen’s Own Gurkha Logistic Regiment

24 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE GURKHA WELFARE TRUST

Opinion Responsibilities of trustees We have audited the financial statements of The for the financial statements Gurkha Welfare Trust for the year ended 30 June As explained more fully in the trustees’ 2019 which comprise the Consolidated Statement of responsibilities statement set out on page 23, Financial Activities, Consolidated and Charity the trustees (who are also the directors of the Balance Sheet and the Consolidated Statement of charitable company for the purposes of company Cash Flows and notes to the financial statements, law) are responsible for the preparation of the including a summary of significant accounting financial statements and for being satisfied that policies. The financial reporting framework that has they give a true and fair view, and for such internal been applied in their preparation is applicable law control as the trustees determine is necessary and United Kingdom Accounting Standards, to enable the preparation of financial statements including Financial Reporting Standard 102 The that are free from material misstatement, Financial Reporting Standard applicable in the UK whether due to fraud or error. and Republic of Ireland (United Kingdom Generally In preparing the financial statements, the trustees Accepted Accounting Practice). are responsible for assessing the group’s and the In our opinion, the financial statements: parent charitable company’s ability to continue as a going concern, disclosing, as applicable, • give a true and fair view of the state of the matters related to going concern and using the group’s and of the parent charitable company’s going concern basis of accounting unless the affairs as at 30 June 2019 and of the group’s trustees either intend to liquidate the group or the and parent charitable company’s net movement parent charitable company or to cease operations, in funds, including the income and expenditure, or have no realistic alternative but to do so. for the year then ended; • have been properly prepared in accordance with Auditor’s responsibilities for the audit United Kingdom Generally Accepted Accounting of the financial statements Practice; and Our objectives are to obtain reasonable assurance • have been prepared in accordance with the about whether the financial statements as a whole requirements of the Companies Act 2006. are free from material misstatement, whether due to fraud or error, and to issue an auditor’s Basis for opinion report that includes our opinion. Reasonable We conducted our audit in accordance with assurance is a high level of assurance, but is not International Standards on Auditing (UK) (ISAs (UK)) a guarantee that an audit conducted in accordance and applicable law. Our responsibilities under those with ISAs (UK) will always detect a material standards are further described in the Auditor’s misstatement when it exists. Misstatements can responsibilities for the audit of the financial arise from fraud or error and are considered statements section of our report. We are material if, individually or in the aggregate, they independent of the group in accordance with the could reasonably be expected to influence the ethical requirements that are relevant to our audit economic decisions of users taken on the basis of the financial statements in the UK, including the of these financial statements. FRC’s Ethical Standard, and we have fulfilled our A further description of our responsibilities for other ethical responsibilities in accordance with the audit of the financial statements is located these requirements. We believe that the audit on the Financial Reporting Council’s website at: evidence we have obtained is sufficient and www.frc.org.uk/auditorsresponsibilities. appropriate to provide a basis for our opinion. This description forms part of our auditor’s report.

26 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 AUDITOR’S REPORT

Conclusions relating to going concern • the Trustees’ Annual Report (which incorporates We have nothing to report in respect of the the strategic report and the directors’ report) following matters in relation to which the ISAs (UK) has been prepared in accordance with applicable require us to report to you where: legal requirements.

• the trustees’ use of the going concern basis Matters on which we are required to report of accounting in the preparation of the financial by exception statements is not appropriate; or In the light of the knowledge and understanding of • the trustees have not disclosed in the financial the group and the parent charitable company and its statements any identified material uncertainties environment obtained in the course of the audit, that may cast significant doubt about the group’s we have not identified material misstatements in or the parent charitable company’s ability to the Trustees’ Annual Report (which incorporates continue to adopt the going concern basis of the strategic report and the directors’ report). accounting for a period of at least twelve months We have nothing to report in respect of the from the date when the financial statements are following matters in relation to which the authorised for issue. Companies Act 2006 requires us to report to you if, in our opinion: Other information • adequate accounting records have not been kept The trustees are responsible for the other by the parent charitable company, or returns information. The other information comprises adequate for our audit have not been received the information included in the Trustees’ Annual from branches not visited by us; or Report. Our opinion on the financial statements does not cover the other information and, except • the parent charitable company financial to the extent otherwise explicitly stated in our statements are not in agreement with the report, we do not express any form of assurance accounting records and returns; or conclusion thereon. • certain disclosures of trustees’ remuneration In connection with our audit of the financial specified by law are not made; or statements, our responsibility is to read the • we have not received all the information and other information and, in doing so, consider explanations we require for our audit whether the other information is materially inconsistent with the financial statements or our Use of this report knowledge obtained in the audit or otherwise This report is made solely to the charitable appears to be materially misstated. If we identify company’s members, as a body, in accordance with such material inconsistencies or apparent material Chapter 3 of Part 16 of the Companies Act 2006. Our misstatements, we are required to determine audit work has been undertaken so that we might whether there is a material misstatement in the state to the charitable company’s members those financial statements or a material misstatement matters we are required to state to them in an of the other information. If, based on the work Auditor’s report and for no other purpose. To the we have performed, we conclude that there is a fullest extent permitted by law, we do not accept or material misstatement of this other information, assume responsibility to anyone other than the we are required to report that fact. We have charitable company and the charitable company’s nothing to report in this regard. members as a body, for our audit work, for this report, or for the opinions we have formed. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: David Sewell (Senior Statutory Auditor) • the information given in the Trustees’ Annual Report (which incorporates the strategic report For and on behalf of Haysmacintyre LLP, and the directors’ report) for the financial year Statutory Auditors for which the financial statements are prepared 10 Queen Street Place, London EC4R 1AG is consistent with the financial statements; and 13 December 2019

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 27 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 30 JUNE 2019

(incorporates the consolidated income and expenditure account)

Notes Unrestricted Restricted 2018-19 2017-18 General Designated Total Total £000 £000 £000 £000 £000 Income from: 3 Donations and legacies Donations 3a 4,550 0 2,205 6,755 6,793 Legacies 3b 6,113 026,115 4,352 Grants Ministry of Defence 3c 002,937 2,937 2,810 Charitable activities 3d Department for International Development 002,650 2,650 3,247 KAAA 0089 89 89 Other trading activities Fundraising Events 3e 296 0 59 355 1,052 Investments 3f 2,238 0 15 2,253 2,709 Total 13,197 0 7,957 21,154 21,052 Expenditure on: 4 Raising funds Fundraising 4f 2,406 002,406 1,889 Investment management costs 4f 303 00303 308 Charitable activities Individual aid 4a 3,760 0 3,772 7,532 7,680 Medical Aid 4b 4,918 0 300 5,218 4,686 Disaster response 4d 602 0 584 1,186 2,125 Residential Homes 4c 0 414 6 420 493 Community aid 4e 792 0 3,678 4,470 4,341 Total 12,781 414 8,340 21,535 21,522 Net income/(expenditure) before other gains and losses 416 (414) (383) (381) (470) Other gains and losses Net gains/(losses) on investments 8 2,679 002,679 896 Net income/(expenditure) 3,095 (414) (383) 2,298 426 Transfers between funds 14 & 15 (344) 359 (15) 00 2,751 (55) (398) 2,298 426 Other recognised gains/(losses) Movement in constructive obligation 13 1,676 001,676 5,958 Profit & loss revaluation (loss)/gain (23) 00(23) (51) Net Movement in Funds 4,404 (55) (398) 3,951 6,333 Reconciliation of funds Funds brought forward 15,688 14,964 348 31,000 24,667

Total Funds Carried Forward 20,092 14,909 (50) 34,951 31,000

28 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 FINANCIAL ACTIVITIES

NOTES

The consolidated statement of financial activities includes the income and expenditure account. There are no other gains and losses other than those shown above. All the Trust’s activities are derived from continuing activities. Deficit for Companies Act purposes (before unrealised gains and losses) is: £1,149,000 (2017/18: deficit £498,000). See Note 17 for a comparative statement of financial activities for year ended 30th June 2018. The notes on pages 35 to 54 form part of these accounts.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 29 CONSOLIDATED AND CHARITY BALANCE SHEET AT 30 JUNE 2019

The Gurkha Welfare Trust Company registration number 05098581

Notes Group Charity 2019 2018 2019 2018 £000 £000 £000 £000 Fixed assets: Tangible assets 7 1,879 1,889 1,879 1,889 Investments 8 69,762 67,951 69,762 67,951 Total fixed assets 71,641 69,840 71,641 69,840 Current assets Medication, project & trading stock 208 263 208 260 Debtors 9 1,587 752 1,611 692 Cash at bank and in hand 6,271 7,006 6,233 6,957 Total current assets 8,066 8,021 8,052 7,909 Liabilities Creditors: amounts falling due within one Year 10 (1,020) (1,195) (1,043) (1,162) Provisions for liabilities falling due within one year Constructive Obligation 13 (4,270) (4,334) (4,270) (4,334) Net current assets or liabilities 2,776 2,492 2,739 2,413 Creditors: amounts falling due after more than one year Gratuity commitments 12 0 (254) 0 (254) Provisions for liabilities falling due after more than one year Constructive Obligation 13 (39,466) (41,078) (39,466) (41,078) Total net assets or liabilities 34,951 31,000 34,914 30,921 Funds: Restricted funds 16 (50) 348 (50) 348 Unrestricted funds General 63,828 61,100 63,791 61,021 Welfare pension reserve (43,736) (45,412) (43,736) (45,412) Net General funds 15 20,092 15,688 20,055 15,610 Designated 15 14,909 14,964 14,909 14,964 Unrestricted funds after provision 35,001 30,652 34,964 30,573 for liabilities and charges

Total funds 34,951 31,000 34,914 30,921

30 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 BALANCE SHEET

NOTES

Group includes GWT Trading Limited, the wholly owned trading subsidiary. The net income in funds for the Trust for the year ended 30 June 2019 was £2,298,000 (2018: £426,000). As permitted by Section 408 of the Companies Act 2006, no separate Statement of Funds or Income and Expenditure account has been presented for the Charity only.

Approved and authorised for issue by the Board of Trustees on 12 December 2019 and signed on their behalf by:

Lieutenant General Sir Nick Pope KCB CBE Chairman 12 December 2019

The notes on pages 35 to 54 form part of these accounts

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 31 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

Notes 2018/19 2017/18 below £000 £000 Cash flows from operating activities: Net cash provided by (used in) operating activities Note A (3,568) (4,622) Cash flows from investing activities: Dividends and interest from investments 2,253 2,709 Proceeds for the sale of property, plant and equipment 00 Purchase of property, plant and equipment (313) (310) Proceeds from sale of investments 15,409 34,079 Purchase of investments (12,503) (30,516) Net cash provided by (used in) investing activities 4,846 5,962 Cash flows from financing activities: Repayment of borrowing 00 Cash inflows from new borrowing 00 Receipt of endowment 00 Net cash provided by (used in) financing activities 00 Operating activities Change in cash and cash equivalents in the reporting period 1,278 1,340 Cash and cash equivalents at the beginning of the reporting period Note B 10,584 9,244 Cash and cash equivalents at the end of the reporting period Note B 11,862 10,584

NOTES A. Reconciliation of net income/(expenditure) to net cashflow from 2018/19 2017/18 £000 £000 Net income/(expenditure) for the reporting period (as per SOFA) 2,298 426 Adjustments for: Depreciation 323 286 (Gains)/losses on investments (2,679) (896) Investments donated (25) 0 Dividends and interest from investments (2,253) (2,709) (loss)/gain on foreign exchange (23) (51) (Increase)/decrease in stocks 55 (17) (Increase)/decrease in debtors (835) (130) Increase/(decrease) in creditors (429) (1,531) Net Cash provided by (used in) operating activities (3,568) (4,622) Cash flow B. Analysis of cash and cash equivalents 2018/19 2017/18 in year £000 £000 £000 Cash in hand and at bank 6,271 7,006 (735) Overdraft facility repayable on demand 0 00 Notice deposits (less than 3 months) 5,591 3,578 2,013 Total cash and cash equivalents 11,862 10,584 1,278

32 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019

NOTES TO THE ACCOUNTS FOR THE YEAR ENDING 30 JUNE 2019

1. BASIS OF PREPARATION • Constructive obligation: The valuation of the constructive obligation is based on the following assumptions: Statement of compliance • Future inflation rate in Nepal 5.5% per annum. The financial statements are prepared under the historical cost convention as modified to include the • Future payments have been discounted at 5.5% revaluation of investments at fair value. The format per annum. of the financial statements has been presented to • Life expectancy for our beneficiaries is 3 years comply with the Companies Act 2006 and FRS102 longer than estimated in the Nepali Government The Financial Reporting Standard applicable in the Mortality tables. UK and Ireland and the Statement of Recommended • There are anticipated 50 new entrants per year Practice Accounting and Reporting by Charities for the next five years. (“SORP 2015”). The Charity is a Public Benefit Entity as defined by FRS102. • 50% of former soldier pensions will be transferred to a widow. General information • Legacies: Income is accrued for pecuniary legacies The Charity is a company limited by guarantee, when a grant of probate has been obtained, it is incorporated in England and Wales (company possible to reliably estimate the amount number: 05098581) and a charity registered in receivable and there is probability of receipt. England and Wales (charity number: 1103669). • Depreciation: The rate of depreciation for The Charity’s registered office address is: tangible fixed assets is selected by management P.O Box 217, 22 Queen Street, Salisbury SP2 2EX based on their estimate of normal economic life taking into consideration the environment in Basis of Consolidation which the asset is deployed. These financial statements consolidate the results, assets and liabilities of the Charity’s trading subsidiary, GWT Trading Limited, on a line by line basis. 2. PRINCIPAL ACCOUNTING POLICIES The Charity’s own Statement of Financial Activities has not been presented, as permitted by section 408 The following principal accounting policies have of the Companies Act 2006. The Charity’s net income been applied: for the year as an individual entity was a surplus of £2,298,000 (2017/18: a surplus of £426,000). Income Income is recognised when the charity has Going concern entitlement to the funds, any performance conditions attached to the item(s) of income have The Trustees consider that there are no material been met, it is probable that the income will be uncertainties which would cast doubt on the received, and the amount can be measured reliably. Charity’s ability to continue as a going concern. Recognition of income is deferred where conditions Significant judgments and sources specify that such income relates to future estimation uncertainty accounting periods. Where donors specify that The preparation of financial statements in funds are for specific purposes such income is compliance with FRS 102 requires the use of certain included in incoming resources of restricted funds. critical accounting estimates. It also requires Donations and legacies income includes donations management to exercise judgment in applying the and gifts in wills which are recognised where there is Charity’s accounting policies. The key judgements entitlement, probability of receipt and the amount that have been applied by management relate to: of the gift is measurable.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 35 NOTES TO THE ACCOUNTS

Income from donations, covenants and gift aid have been allocated on a time spent and area includes receipts from fundraising events. occupied basis to raising funds and charitable activity. Donations, together with the resulting tax credit Governance costs are apportioned on the same from gift aid, is credited directly to the statement of basis as the office and staff costs and are disclosed financial activities on an accruals basis. Donations in the notes comprising audit and legal fees and and all other receipts (including capital receipts) the costs associated with constitutional and from fundraising are reported gross and the related statutory requirements. fundraising costs are reported in raising funds. Costs in Nepal have been allocated to the direct Pecuniary Legacies are accrued and credited directly charitable activities. Direct costs include actual grants to the statement of financial activities when the made and costs related to people directly employed in value becomes known with reasonable certainty, providing one of our charitable activities. Other direct probability of receipt and the ability to estimate costs such as staff costs and overheads of the Area with sufficient accuracy the amount receivable. Welfare Centres established for the delivery of more For residuary and reversionary legacies, entitlement than one charitable activity are apportioned as other is established in the year that the Charity has been direct costs. Support costs include staff and notified of an impending distribution. Where a administrative overheads. Support and governance legacy is received, or notified as receivable (by the costs have been allocated to activity cost categories personal representatives) after the accounting year in a fair and appropriate method on a basis consistent end, but it is clear that a legacy had been agreed by with the use of resources by applying person days the personal representatives prior to the year end spent on the various activities or space occupied. (hence providing evidence of a condition that existed at the balance sheet date) it is accrued in the Grants payable to individuals may be subject to statement of financial activities and the balance sheet. conditions. Expenditure on such performance- related grants is recognised to the extent that the Grant Income. Income from government and other recipient has complied with the conditions. grants, whether ‘capital’ grants or ‘revenue’ grants, is recognized when the charity has entitlement to Short term benefits including holiday pay are the funds, any performance conditions attached to recognised as an expense in the period in which the the grants have been met, it is probable that the service is received. Termination benefits are income will be received and the amount can be accounted for on an accrual basis and in line with measured reliably and is not deferred. FRS 102. Income from other trading activities is recognised as Taxation earned as the related goods are provided. Irrecoverable VAT is not separately analysed and Interest and Dividends Receivable. Investment is charged directly to the Statement of Financial income is recognised on a receivable basis and the Activities (SOFA) as part of the expenditure to amounts can be measured reliably. Interest on funds which it relates. on deposit is included when receivable upon notification by the relevant banking institutions. Operating leases Dividends receivable on assets held for investment Rental payments under operating leases are charged purposes are receivable upon notification by the on a straight-line basis over the period of the lease. relevant investment institutions. Foreign currencies Expenditure Fixed assets in foreign currencies are converted to All expenditure is included in accordance with the sterling at the exchange rate ruling at the time of accruals concept. Any liabilities as a result of legal or purchase. Investments, current assets and liabilities constructive obligations committing the Trust to in foreign currencies are converted into sterling at expenditure have been included. the exchange rate ruling at the balance sheet date. Cost of raising funds comprises costs directly Transactions during the year in foreign currencies, attributable to fundraising and managing the mainly Nepalese rupees, are converted into sterling investment portfolio. Charitable activity costs in the at the average rate of exchange for the month in UK are incurred in running the Gurkha Welfare Advice which the transaction was undertaken. Exchange Centre and in supporting the activities in Nepal. The rate gains or losses are recorded as support costs to costs of running the Trust’s office and staff costs the activities to which they relate.

36 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

Pensions and retirement benefits restructuring and has raised a valid expectation in In UK, the Trust makes contributions to employee those affected by either starting to implement the individual defined contribution pension plans. plan or announcing its main features to those affected and therefore has a legal or constructive In Nepal, the Trust contributes to individual plans obligation to carry out the restructuring; and within a defined contribution Provident Fund provision is not made for future operating losses. managed by Standard Chartered Bank Nepal Limited. In addition, historically, employees were entitled to • Provisions are measured at the present value of a one-off gratuity payment on leaving that was the expenditures expected to be required to settle based on length of service. Following changes under the obligation using a pre-tax rate that reflects the Labour Act of Nepal in 2017, the Gratuity liability current market assessments of the time value of has transferred from a defined benefit to money and the risks specific to the obligation. contributory scheme in which employers are The increase in the provision due to passage of required to make a monthly contribution of 8.33% time is recognised as a finance cost. (rising to 10% in FY19-20) of salary for all employees that will eventually be transferred into a Investments Government Gratuity Fund. Listed investments are stated in the balance sheet Contributions for both UK and Nepalese schemes at fair value. All movements in value arising from are charged to the SOFA on the basis of amounts investment changes and revaluations are included provided for the period. in the Statement of Financial Activities (SOFA).

Fund accounting Fixed assets Funds held by the Trust are either: The cost of minor additions or acquisitions of fixed • Unrestricted general funds – these are funds, assets under £5,000 is charged wholly to the SOFA which can be used in accordance with the in the year of purchase. Fixed assets above this charitable objects at the discretion of the Trustees. amount are capitalised in the financial statements at • Designated funds – these are funds set aside by cost. Donated fixed assets are brought into account the Trustees out of unrestricted (general) funds at an estimate of their market value at the time of for specific purposes. acquisition. Land, beneficially owned by the Trust, • Restricted funds – these are unspent funds that is valued at historical cost and is not depreciated. can only be used for particular restricted purposes within the objects of the Trust. Restrictions arise Depreciation when specified by the donor or when funds are raised for particular restricted purposes. Depreciation is provided on all assets except land to write off the costs of the asset less any material Further explanation of each fund is included in the residual value, by equal instalments over their notes to the financial statements. expected useful lives. Depreciation rates are: Provisions • Completed buildings 10% per annum on Provisions are recognised when the Group has a a straight-line basis. present legal or constructive obligation as a result • Vehicles and equipment 25% per annum on a of past events; it is probable that an outflow of straight-line basis. resources will be required to settle the obligation; and the amount of the obligation can be • Computers and software 33.33% per annum on estimated reliably. a straight-line basis. Where there are a number of similar obligations, For all depreciable assets, a full year’s depreciation is the likelihood that an outflow will be required in charged in the year of acquisition or completion and settlement is determined by considering the class no depreciation is charged in the year of disposal. of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect Stocks to any one item included in the same class of The stocks of medication, project materials and obligations might be small. In particular: bought-in goods for sale are valued at the lower • Restructuring provisions are recognised when of cost and net realisable value on a first in first the Group has a detailed, formal plan for the out basis.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 37 NOTES TO THE ACCOUNTS

Financial Instruments Basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable are accounted for on the following basis: Cash and cash equivalents includes cash in hand, deposits held at banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts, when applicable, are shown within current liabilities. Debtors and creditors are measured at the transaction price less any provision for impairment. Any losses arising from impairment are recognised as expenditure. Bank borrowings. Liabilities for borrowings which are subject to a market rate of interest are measured at the value of the amount advanced, less capital repayments.

3. INCOME

Total income includes income transferred from the charitable trust “Gurkha Welfare Trust”, former charity number 1034080. The Trust is retained while it receives donations and legacy income.

2019 2018 £000 £000 a. Donations Donations from individuals 6,047 5,870 Donations from companies, trusts, clubs and organisations 708 923 6,755 6,793 b. Legacies 6,115 4,352 c. Grants Ministry of Defence – to support operating costs in Nepal 2,937 2,810 d. Charitable Activities DfID – for water and sanitation projects in remote locations 2,650 3,247 KAAA – for medical camps 89 89 e. Other trading activities Fundraising events 355 1,052 f. Investments Investment dividends and interest 1,891 2,281 Bank interest 362 428

Donations from individuals include part of the contributions made by all ranks of the Brigade of Gurkhas under Service Day’s Pay Giving of £235,000 (2017/18: £204,000). This also includes donations from the Gurkha Contingent of the Singapore Police, who also qualify for support from the Trust. Income from investments includes interest, dividends and transitional tax credits. Fundraising events include income generated by branches and supporters throughout the country as well as events such as the Carol Service and the Doko Challenge and sponsorship income from Trailwalker.

38 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

4. EXPENDITURE Grants Direct Costs Support Costs 2018/19 2017/18 Support Governance Totals Totals £000 £000 £000 £000 £000 £000 a. Individual Aid Welfare pension 4,196 0 1,371 47 5,614 6,025 Care for the elderly 87 01 189 169 Disability support 159 0 71 2 232 215 Winter allowance 81 0 35 2 118 137 Welfare Grants & support 729 0 144 7 880 536 UK welfare 250 330 4 15 599 598 Total individual aid 5,502 330 1,626 74 7,532 7,680 b. Medical aid 938 3,396 840 44 5,218 4,686 c. Residential Homes 29 334 53 4 420 493 d. Disaster Response 0 982 194 10 1,186 2,125 e. Community aid School projects 207 582 310 10 1,109 982 Water projects 0 2,957 399 5 3,361 3,359 Total community aid 207 3,539 709 15 4,470 4,341

Charitable activities total 6,676 8,581 3,422 147 18,826 19,325 f. Cost of generating funds Fundraising 0 1,820 554 32 2,406 1,889 Investments 0 281 21 1 303 308 Total costs of 0 2,101 575 33 2,709 2,197 generating funds

Total 6,676 10,682 3,997 180 21,535 21,522

UK Welfare includes a grant of £250,000 (2017/18: £250,000) paid to ABF The Soldiers’ Charity for the support of former Gurkhas who have retired in the UK. All other grants totalling £6,426,000 (2017/18: £6,253,000) were to individuals or small community groups.

The number of grants issued to individuals or communities on the table below are recorded on a beneficiary database based on British Army records which is subject to independent audit in Nepal.

All grants to individuals require proof of identity before issue and community grants are only arranged with approval from the local community council.less capital repayments.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 39 NOTES TO THE ACCOUNTS

Activity Beneficiaries Notes There were 4,831 recipients at the start of the year and 61 new recipients. Welfare 4,892 A detailed database of all welfare pensioners is maintained based on data from pensions: British Army records. Payments are made on a quarterly basis and require proof of identity. We maintained 406 grants to assist the support of the most vulnerable. A fixed Care: 406 number of grants have been issued and details of the beneficiaries recorded on our database.

Disability The number of recipients increased to 227 by the year end. This data is held 227 Support: on the same database as the welfare pensioners and is subject to both proof of identity and medical requirement. Winter All welfare pensioners, wives, DSG recipients and residential home residents 5000+ allowance: supported last December received items (jackets, shawls, hats) purchased through the winter allowance.

Welfare These grants were awarded for cases of special need not covered by the other (Hardship) 1,831 awards. Each grant is individually assessed and approved by a senior member grants: of staff. For 18-19, this included the first phase of the 300 Homes project in which 103 earthquake resilient houses were provided.

Disaster 10 Completion of 8 schools and 2 community centres under the final phase of the response: (projects) Earthquake Disaster response programme. The programme formally completed on 31 October 2018. Our 2 residential homes have a capacity of 48. There were 45 residents at the Residential 45 30 June 2019. 2 rooms in each home have become rehabilitation and respite care: rooms providing short - medium term care for pensioners prior to returning to their homes.

School 132 Communities were assisted through the repair, extension or new build of a projects: (projects) school. Every project is arranged with and authorised by the local community committee and requires a community contribution.

Further information on the grants can be found in the Trustees’ Annual Report. The total charitable activity cost of £18,826,000 represents over 87% of total expenditure.

Analysis of Support Costs Total Governance Sub Total Sub Support Sub Total Sub Currency Professional & vehicles & Services & Legal Premises People £000 £000 £000 £000 £000 £000 £000 £000 a. Individual Aid 1,315 304 138 3 (134) 1,626 74 1,700 b. Medical Aid 677 156 73 2 (68) 840 44 884 c. Disaster Response 156 36 17 1 (16) 194 10 204 d. Residential Homes 42 10 40(3) 53 4 57 e. Community Aid 588 71 75 1 (26) 709 15 724 f. Fundraising 317 69 126 42 0 554 32 586 g. Investment 13 242021 1 22 management Total 3,108 648 437 51 (247) 3,997 180 4,177

Basis of Time Space Time Direct Pro rata Attribution allocation spent & time spent with cost & time

40 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

5. GOVERNANCE COSTS

Apportioned governance costs were: 2018/19 2017/18 Total Total £000 £000 Staff employment costs 36 49 Staff & trustee other costs 61 56 Premises costs 6 6 Office services 6 7 Legal & professional 71 47 180 165

6. STAFF, TRUSTEE AND GOVERNANCE COSTS a. Staff numbers The trust employed the following average number of staff: 2018/19 2017/18 UK: Administration & fundraising 18 17 Welfare 9 10 Nepal: Individual aid inc medical and general staff 317 281 Water projects 124 131 Schools projects 19 8 Disaster response 18 36 b. Staff costs 2018/19 2017/18 £000 £000 UK: Salaries 933 867 Social security costs 95 86 Pension 83 78 1,111 1,031

Nepal: Salaries 3,680 3,259 Benefits 66 87 Pension (see Note 12) 329 711 Gratuity (see Note 12) 276 323 5,462 5,411

The number of employees whose emoluments 2018/19 2017/18 exceeded £60,000 for the year was: Number Number £60,001 - £70,000 1 - £70,001 - £80,000 - 1 £80,001 - £90,000 1 - £90,001 - £100,000 - 1 £100,001 - £110,000 1 -

Employer’s pension contributions for the higher paid employees were £22,000. (2017/18: £16,000). Key people in the Trust in UK and Nepal with delegated authority from the Trustees are the Director, Director GWT(N), the Field Director GWT(N), Deputy Director Plans & Resilience and the Head of Fundraising. They have combined salary and benefits cost to the Trust totalling £262,000 (2017/18: £255,000). Both the Director GWT(N) and the Field Director GWT(N) are seconded from the British Army with their costs being met by the MOD. The Trust did not incur any costs in respect of redundancy or termination payments (2017/18: £16,000).

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 41 NOTES TO THE ACCOUNTS

Trustees’ expenses, remuneration and donations In 2018/19 no Trustee received any remuneration or pension but five Trustees were either reimbursed or expenses were paid on their behalf of £18,500: principally on travel to Nepal but also in respect of attendance at meetings at the GWT Salisbury office and in London (2017/18: six Trustees were either reimbursed or expenses were paid on their behalf of £18,000). Trustees donated a total of £1,560 (2017/18: £720).

Related party transactions Colonel James Robinson is a Trustee of Trust. Transactions between The Gurkha Welfare Trust and The Gurkha Museum Trust during 2018/19 were: Payments to The Gurkha Museum Trust £3,654 Payments from The Gurkha Museum Trust £9,962 Payments due to The Gurkha Museum Trust at 30 June 2019 £486

Net expenditure Net expenditure for the period is stated after charging: 2018/19 2017/18 £000 £000 Audit Fees UK excluding VAT Haysmacintyre LLP UK 18-19 29 27 Haysmacintyre LLP Nepal 18-19 8 0 Haysmacintyre LLP – 17-18 adjust 5 0 Nepal: CSC & Co 11 15 Joshi and Bhandari 5 4 Actuarial fees 2 2 Trustee indemnity insurance 2 2

Operating Lease commitments At 30 June 2019 the group’s future minimum operating lease payments are as follows: 2018/19 2017/18 £000 £000 UK Property lease Within 1 year 82 82 Between 1 to 5 years 305 327 Over 5 years 221 282

Nepal Property Within 1 year 38 32 Between 1 to 5 years 7 14 Over 5 years 0 2

42 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

7. MOVEMENT OF TANGIBLE FIXED ASSETS, GROUP AND CHARITY

Freehold Land Leasehold Vehicles & Computer Assets in Total & Buildings Property Equipment Software Construction £000 £000 £000 £000 £000 £000 Cost At 1 July 2018 2,040 503 792 136 9 3,480 Asset reclass 24 (24) 0 0 00 Additions 7 33 18 59 196 313 At 30 June 2019 2,071 512 810 195 205 3,793 Depreciation At 1 July 2018 (787) (107) (657) (40) 0 (1,591) Asset reclass (2) 2 0 0 00 Depreciation (131) (51) (83) (58) (323) At 30 June 2019 (920) (156) (740) (98) 0 (1,914) Net Book Value At 1 July 2018 1,253 396 135 96 9 1,889 At 30 June 2019 1,151 356 70 97 205 1,879

Reclassification is in respect of works at Dharan AWC completed in FY17-18 which were incorrectly reported as leasehold.

8. INVESTMENTS

The historical cost of investments at 30 June 2019 (including investment cash) was £62,167,176 (2017: £62,231,000). 86% of the investment assets are placed in a mixed portfolio of thematic funds. Listed investments 2018/19 2017/18 £000 £000 Fixed interest UK 4,986 4,930 Overseas 4,274 4,693 Equities UK 237 6,651 Americas 547 468 Emerging markets 3,059 4,047 Alternative investments 10,311 11,553 Other overseas/Non-specific region 38,127 28,626 Property 2,630 3,405 64,171 64,373 Cash held as part of investment portfolio 5,591 3,578 69,762 67,951

Major movements in investments during the year were: 2018/19 2017/18 £000 £000 Opening market value (excl. Cash) 64,373 67,040 Purchases 12,503 30,516 Disposal proceeds (15,409) (34,079) Realised gains/(losses) (768) (28) Unrealised gains/(losses) 3,447 924 Investments donated 25 0 Closing market value (excl cash) 64,171 64,373

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 43 NOTES TO THE ACCOUNTS

Investment in subsidiary GWT owns 100% of the issued share capital of GWT Trading Ltd, being 2 ordinary shares with a nominal value of £1. GWT Trading Ltd is registered in England and Wales No.: 02986861 and its registered office is P.O Box 2170, 22 Queen Street, Salisbury SP2 2EX.

GWT Trading Ltd Statement of Income and Retained Earnings for the year ended 30 June 2019 2018/19 2017/18 £ £ Turnover 1 83,957 142,777 Cost of sales 2 (41,660) (59,432) Gross profit 42,297 83,345 Administrative expenses (5,398) (4,046) Operating profit 36,899 79,299 Profit for the financial year before taxation 5 36,899 79,299 Tax on profit on ordinary activities 0 0 Profit for the financial year after taxation 36,899 79,299

GWT Trading Ltd Statement of Changes in Equity 2018/19 2017/18 ££ ££ P&L Share P&L Share Capital Capital Total funds brought forward 79,299 2 02 Profit for the year 36,899 0 79,299 0 Gift Aid payment (79,299) 0 00 Retained earnings at year end 36,899 2 79,299 2

The company has no recognised gains or losses other than the profit in both periods. All amounts relate to continuing activities.

GWT Trading Ltd Balance Sheet at 30 June 2019 2019 2018 £ £ Current Assets Stock 0 2,440 Debtors 9,454 27,815 Cash at bank and in hand 37,632 50,046 47,086 80,301 Creditors - amounts falling due within one year (10,185) (1,000) Net Current Assets 36,901 79,301 Net Assets 36,901 79,301 Share Capital 2 2 Retained Profit 36,899 79,299 36,901 79,301

44 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

9. DEBTORS Group Charity 2019 2018 2019 2018 £000 £000 £000 £000 Trade Debtors 52 199 52 139 Prepayments and Accrued Income 126 4 126 4 Legacies 1,062 342 1,062 342 Other Debtors 347 207 347 207 Intercompany balances 0 0 24 0 1,587 752 1,611 692

10. CREDITORS Group Charity 2019 2018 2019 2018 £000 £000 £000 £000 Taxation & social security 28 25 28 25 Trade Creditors 332 503 324 503 Creditors – Tax Deducted at Source 10 14 10 14 Accruals 164 56 162 56 Other Creditors 486 597 486 597 Intercompany balances 0 0 33 (33) 1,020 1,195 1,043 1,162

11. FINANCIAL INSTRUMENTS Group Charity 2018/19 2017/18 2018/19 2017/18 £000 £000 £000 £000 Financial assets measured at fair value Investments in shares 64,171 64,373 64,171 64,373 Financial assets measured at amortised cost Gratuity fund (see Note 12) 0 25 0 25 Accrued Income - Legacies 1,062 342 1,062 342 Accrued Income – Other 77 0 77 0 Other debtors 347 207 347 207 Investments in cash 5,591 3,578 5,591 3,578 7,077 4,152 7,077 4,152

Financial liabilities measured at amortised cost Trade creditors 332 503 324 503 Other creditors 486 597 486 597 Gratuity liability (see Note 12) 0 254 0 254 818 1,354 810 1,354 Other liabilities measured at fair value Constructive obligations (see Note 13) 43,736 45,412 43,736 45,412

Net financial instruments 26,694 21,759 26,702 21,759

The constructive obligation is measured at fair value based on the expected amounts payable, discounted at an appropriate market rate. The Trust has no loans or overdrafts and has no forward currency contracts or hedging arrangements.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 45 NOTES TO THE ACCOUNTS

12. PENSIONS AND 13. CONSTRUCTIVE • An estimated number of 4,444 welfare pensioners (2017/18: LEAVING BENEFITS OBLIGATION 4,831) with an average age of 80.35. There are 222 DSG The charity provides defined The Trust has recognised for some beneficiaries with an average contribution pension years a long-term constructive age of 57.65. arrangements for its employees obligation, as defined by SORP in the UK, and UK employees in 2015, in respect of its welfare • An estimated 1,515 ex-Gurkhas Nepal. Each employee is able to pensions. SORP 2015 requires that who left the service in the late either join the Government’s such “constructive obligations”, 1960’s and early 1970’s and 280 NEST scheme or arrange their even though they are not legally ex who served own personal pension plan and binding liabilities, be recognised before 1947 who are not in the charity contributes 2% of on a charity’s balance sheet. receipt of a service pension may salary for every 1% contributed From 2014/15 the Trust has apply for a welfare pension in by the employee, up to a recognised a similar obligation the future. A provision for 50 maximum of 10%. Contributions for the welfare support provided new entrants for each of the are charged to the statement of to the disabled children of next five years has been made. financial activities in the year in welfare pensioners who were which they are made. The assets not able to support themselves • Future payments have been of the plans are held separately when their parents were deceased. discounted at 5.5% pa (2017/18: from those of the charity. The 5.5%), which represents an After detailed examination of contributions made by the charity average yield on high-quality the mortality rate for our in 2018/19 were £90,000 (2017/18: bonds in Nepal. beneficiaries it was discovered £85,000). No further liability that they were living longer than The value of the obligation is arose other than these payments. estimated using the Nepali particularly sensitive to the The retirement benefits in Nepal Government’s official table. exchange rate of NPRs to GBP consist of a defined contribution With actuarial advice, an and whilst this year the average Provident Fund with 10% adjustment has been applied rate has been NPRs 144.29 / £1, contributions from both employer to the calculation of the the rate fell 3% during May - June and employee. The Provident constructive obligation assuming 2019 reflecting uncertainty over Fund is held by the Gurkha that our welfare pension Brexit. Based on the exchange Welfare Scheme Staff Retirement beneficiaries will live three years rate of NPRs 138.26 / £1, (2017/18: Benefit Fund, an independent longer than the normal Nepali NPRs 142.11.00 / £1) that applied body. In addition Nepali Labour life expectancy. In addition, on 30th June 2019 the value of Laws require employers to an allowance is added for new the obligation for the welfare contribute to a Gratuity fund. entrants and the transfer of pension was £40,374,000. Traditionally this was accumulated the pension to a widow on the This is a reduction of £1,970,000 in a fund and paid to employees death of an ex-Gurkha. on the figure for 2017/18 of on leaving based on years of An independent actuarial £42,344,000. The value required service and an independent assessment of the net present to cover DSG has increased gratuity fund was established value of future payments for by £294,000 following the to match the liability (2017/18: both the welfare pension and the introduction of one rate from £254,000). In 2017, under the disability support (DSG) has been Labour Act Nepal the Gratuity 1 July 2019 to £3,362,000, obtained using the following has changed from a defined (2017/18: £3,068,000). The long-term assumptions: benefit to a defined contribution combined total constructive scheme where the employer • The level of benefit agreed for obligation was £43,736,000. contributes 8.33% (rising to 10% welfare pensions for 2019/20, in 2019-20) of the salary into a NPRs 138,000 per annum Gratuity Fund on a monthly basis. (132,000 per annum in 2018/19) The Trust has no further liability and DSG of NPRs 114,000 will for the Gratuity other than the increase with inflation at monthly payments recognised 5.5% over the long term (5.5% in the SOFA. in 2017/18).

46 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

14. ANALYSIS OF NET ASSETS BETWEEN FUNDS OF THE GROUP AND CHARITY

Unrestricted Unrestricted Restricted Total General Designated £000 £000 £000 £000 Tangible assets 789 1,090 0 1,879 Investments 55,943 13,819 0 69,762 Current assets 8,116 0 (50) 8,066 Current liabilities (1,020) 00(1,020) Constructive obligation (43,736) 00(43,736) 20,092 14,909 (50) 34,951

The unrestricted designated fund provides for 20 year running costs of the two Residential Homes and a Disaster Response fund.

15. UNRESTRICTED FUNDS OF THE GROUP AND CHARITY

Balance at 1 Incoming Outgoing Gains and Movement Balance at July 2018 resources resources Transfers in obligation 30 June 2019 in the year in the year £000 £000 £000 £000 £000 £000 Designated funds Disaster response 6,000 00 0 06,000 Residential homes 8,964 0 (414) 359 0 8,909 Total designated funds 14,964 0 (414) 359 0 14,909 General funds 15,688 13,197 (12,781) 2,312 1,676 20,092 Total unrestricted funds 30,652 13,197 (13,195) 2,671 1,676 35,001

Unrestricted funds, both general and designated, are expendable at the discretion of the Trustees in the furtherance of the Trust’s objectives. The designated funds have been earmarked by the Trustees for particular purposes but the designations have an administrative purpose only and do not legally restrict the Trustees’ discretion to apply the funds. Trustees took the prudent precaution in 2011-12 of creating a designated fund to cover the running costs of the residential homes for the next twenty years so that the homes would not be a drain on other activities. In June 2018, following advice from leading seismologists, Trustees created a designated fund to enable an immediate response to any future natural disasters. This fund remains at £6,000,000 at 30 June 2019.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 47 NOTES TO THE ACCOUNTS

16. RESTRICTED FUNDS OF THE CHARITY

Balance at Income Expenditure Transfers Balance at 01 Jul 18 30 Jun 19 £000 £000 £000 £000 £000 a. Grants to individuals: Welfare pensions & DSG 0 548 (548) 00 Welfare grants 0 897 (880) 0 17 Winter allowance 0 80 (80) 00 UK welfare 00000 Nepal welfare 00000 General individual aid 00000 0 1,525 (1,508) 0 17 b. Medical: Medical 0 212 (212) 00 Medical camps 0 88 (88) 00 0 300 (300) 00 c. Residential Homes 06(6) 00 d. Disaster Response: 0 313 (313) 00 e. Water projects: Water projects - DFID 333 2,662 (3,080) 0 (85) Water projects – other 0 118 (118) 00 333 2,780 (3,198) 0 (85) f. Schools projects: Neal Turkington Fund 14 40018 Schools 0 47 (47) 00 14 51 (47) 0 18 g. Other grants: Vehicles & equipment 0 41 (26) (15) 0 MOD grant in Aid 0 2,937 (2,937) 00 Support & infrastructure 00000 UK Admin & fundraising 05(5) 00 348 7,958 (8,340) (15) (50) a. Grants to individuals Restricted funds for welfare pensions are obtained from individuals that regularly donate to a pensioner support fund as well as other advertising and appeals. One supporter continued to fund the Winter Allowance in 2018-19. b. Medical Several charitable trusts have specifically sponsored the expansion of the field medical and care services and Kadoorie Agricultural Aid Association fund the medical camps. c. Disaster response Following the disastrous earthquakes in Nepal in April 2015 an appeal was launched to enable us to help individuals and communities in the affected areas. The Disaster Response programme was completed at 31 October 2018. d. Water projects DFID award a grant for the rural water and sanitation programme with additional funding coming from charitable trusts and individuals.

48 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

e. Schools projects Several individuals and charitable trusts have sponsored the rebuilding of schools. A memorial fund in memory of Neal Turkington, lost in action while serving in Afghanistan, funded two major build projects in 2013. Funds continue to be raised for this cause although there was no expenditure incurred in support of the two schools during 2018-19. f. Other grants The MOD grant-in-aid is provided to support the administration and infrastructure costs of the GWT(N) while several individuals and trusts have sponsored the upgrading of our medical clinics, motorbikes and all-terrain vehicles to assist our field staff in reaching remote locations.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 49

NOTES TO THE ACCOUNTS

The following notes, numbers 17 to 22, refer to financial year 2017/18 and are included for comparative purposes only.

17. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES FOR YEAR ENDED 30 JUNE 2018 Notes Unrestricted Restricted 2017-18 General Designated Total £000 £000 £000 £000 Income from: 3 Donations and legacies Donations 3a 5,192 0 1,601 6,793 Legacies 3b 4,015 96 241 4,352 Grants Ministry of Defence 3c 002,810 2,810 Charitable activities 3d Department for International Development 003,247 3,247 KAAA 0089 89 Other trading activities Fundraising Events 3e 886 0 166 1,052 Investments 3f 2,703 062,709 Total 12,796 96 8,160 21,052

Expenditure on: 4 Raising funds Fundraising 4f 1,889 001,889 Investment management Costs 4g 308 00308 Charitable activities Individual aid 4a 5,098 0 2,582 7,680 Medical Aid 4b 4,351 0 335 4,686 Disaster response 4d 982 0 1,143 2,125 Residential Homes 4c 0 493 0 493 Community aid 4e 347 96 3,898 4,341

Total 12,975 589 7,958 21,522

Net (expenditure)/income before (179) (493) 202 (470) other gains and losses Other gains and losses Net gains/(losses) on Investments 8 896 00896 Net (expenditure)/income 717 (493) 202 426 Transfers between funds 14&15 (3,319) 3,306 13 0 (2,602) 2,813 215 426 Other recognised gains/(losses) Movement in constructive Obligation 13 5,958 005,958 Profit & loss revaluation gain/(loss) (51) 00(51) Net Movement in Funds 3,305 2,813 215 6,333 Reconciliation of funds Funds brought forward 12,383 12,151 133 24,667 Total Funds Carried Forward 15,688 14,964 348 31,000

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 51 NOTES TO THE ACCOUNTS

18. COMPARATIVE STATEMENT OF EXPENDITURE 2017-18

Grants Direct Support costs 2017/18 costs Support Governance Totals Charitable activities £000 £000 £000 £000 £000 a. Individual aid Welfare pensions 4,534 0 1,445 46 6,025 Care for the elderly 72 95 11169 Disability support 153 0 60 2 215 Winter allowance 98 0 38 1 137 Welfare grants 381 0 151 4 536 UK welfare 253 326 4 15 598 Total 5,491 421 1,699 69 7,680 b. Medical aid 721 3,026 903 36 4,686 c. Residential homes 32 400 57 4 493 d. Disaster Response 41 1,854 214 16 2,125 e. Community aid Schools projects 218 425 331 8 982 Water projects 0 2,957 398 4 3,359 Total Community Aid 218 3,382 729 12 4,341

Charitable activities total 6,503 9,083 3,602 137 19,325

Raising funds f. Fundraising 0 1,341 521 27 1,889 g. Investment management 0 289 18 1 308 Raising funds total 0 1,630 539 28 2,197 Total 6,503 10,713 4,141 165 21,522

19. COMPARATIVE ANALYSIS OF SUPPORT COSTS 2017-18 Total Governance Currency Professional & vehicles & Services & Legal Premises People

£000 £000 £000 £000 £000 £000 £000 a. Individual Aid 1,154 214 89 3 239 69 1,768 b. Medical Aid 613 114 48 2 126 36 939 c. Disaster Response 144 27 13 1 29 16 230 d. Residential Homes 38 73 0 9 461 e. Community Aid 580 62 40 0 47 12 741 f. Fundraising 300 53 134 34 0 27 548 g. Investment management 11 24 1 0 119

Total 2,840 479 331 41 450 165 4,306

Basis of Time Space Time Direct Pro rata Attribution allocation spent & time spent with cost & time

52 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 NOTES TO THE ACCOUNTS

20. COMPARATIVE ANALYSIS OF NET ASSETS BETWEEN FUNDS, GROUP AND CHARITY 2017-18

Unrestricted Restricted Total £000 £000 £000 Tangible assets 1,869 20 1,889 Investments 67,951 0 67,951 Current assets 7,693 328 8,021 Current liabilities (1,195) 0 (1,195) Gratuity commitments (254) 0 (254) Constructive obligation (45,412) 0 (45,412) 30,652 348 31,000

21. COMPARATIVE UNRESTRICTED FUNDS OF THE GROUP AND CHARITY 2017-18

Balance at Incoming Outgoing Gains and Movement Balance at 1 July 2017 resources resources Transfers in obligation 30 June 2018 in the year in the year £000 £000 £000 £000 £000 £000 Designated funds Schools projects 0 96 (96) 000 Disaster Response 0006,000 0 6,000 Residential homes 12,151 0 (493) (2,694) 0 8,964 Total designated funds 12,151 96 (589) 3,306 0 14,964 General funds 12,383 12,796 (12,975) (2,474) 5,958 15,688 Total unrestricted funds 24,534 12,892 (13,564) 832 5,958 30,652

Unrestricted funds, both general and designated, are expendable at the discretion of the Trustees in the furtherance of the Trust’s objectives. The designated funds have been earmarked by the Trustees for particular purposes but the designations have an administrative purpose only and do not legally restrict the Trustees’ discretion to apply the funds. Trustees took the prudent precaution in 2011-12 of creating a designated fund to cover the running costs of the residential homes for the next twenty years so that the homes would not be a drain on other activities. This year, following advice from leading seismologists, the Trustees created a new designated fund to enable an immediate response to any future natural disaster.

The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 53 NOTES TO THE ACCOUNTS

22. COMPARATIVE RESTRICTED FUNDS OF THE CHARITY 2017-18

Balance at Income Expenditure Transfers Balance at 30 Jun 18 01 Jul 17 £000 £000 £000 £000 £000 a. Grants to individuals: Welfare pensions & DSG 0 282 (282) 00 Welfare grants 0 17 (17) 00 Winter allowance 0 100 (100) 00 UK welfare 0 11 (11) 00 Nepal welfare 03(3) 00 General individual aid 00000 0 413 (413) 00 b. Medical: Medical 0 246 (246) 00 Medical camps 0 89 (89) 00 0 335 (335) 00 c. Disaster Response: 0 869 (869) 00 d. Water projects: Water projects - DFID 133 3,252 (3,052) 0 333 Water projects – other 0 285 (285) 00 133 3,537 (3,337) 0 333 e. Schools projects: Neal Turkington Fund 01013 14 Schools 0 138 (138) 00 139 (138) 13 14 f. Other grants: Vehicles & equipment 05(5) 00 MOD grant in Aid 0 2,810 (2,810) 00 Support & infrastructure 0 50 (50) 00 UK Admin & fundraising 02(2) 00 133 8,160 (7,958) 13 348

g. Grants to individuals j. Water projects Restricted funds for welfare pensions are DfID award a grant for the rural water and obtained from individuals that regularly donate sanitation programme with additional funding to a pensioner support fund as well as other coming from charitable trusts and individuals. advertising and appeals. One supporter continues to fund the Winter Allowance. k. Schools projects Several individuals and charitable trusts have h. Medical sponsored the rebuilding of schools and a Several charitable trusts have specifically memorial fund in memory of Neal Turkington, sponsored the expansion of the field medical lost in action while serving in Afghanistan, and care services and Kadoorie Agricultural Aid continues to raise funds for this cause. Association fund the medical camps. l. Other grants i. Disaster response The MOD grant-in-aid is provided to support the Following the disastrous earthquakes in Nepal administration and infrastructure costs of the GWTN in April 2015 an appeal was launched to enable whilst several individuals and trusts have sponsored us to help individuals and communities in the the upgrading of our medical clinics and motorbikes affected areas. to assist our field staff in reaching remote locations.

54 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 55 56 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 The Gurkha Welfare Trust Annual Report and Accounts, Year ended 30 June 2019 57 Registered Charity Number: 1103669 Company Limited by Guarantee Number: 05098581 Registered in England

The Gurkha Welfare Trust P.O Box 2170 22 Queen Street Salisbury SP2 2EX

www.gwt.org.uk 01722 323 955 01/20